1. REGULATIONS RELATING TO THE INSURANCE INDUSTRY Edition 2 So, what should we be looking at in terms of regulations? If the simple answer was all those regulations affecting the insurance industry our subject matter would fill an encyclopedia. As mentioned in the first edition we will therefore focus on Solvency 2, Solvency Assessment and Management, Legal changes and FSB areas. To help guide us let’s list the topics we wish to cover. We might add more going forward (or even discard some if they become too complicated!) but for the present let’s start with the following; Solvency 2 Solvency Assessment and Management (SAM) Company Act 71 of 2008 (Co Act) Insurance Act 53 of 1998 (Ins Act) National Treasury Policy Document of February 2011 (SA Treasury) What is their function and relevance? Solvency 2 - background Solvency 2 is a new set of regulatory changes for the European Insurance industry which will establish a revised set of capital requirements and risk management standards to replace the current Solvency 1 requirements. Development began as early as 2005 and implementation is expected to start in January 2013. To go further back Solvency 1 was the name given to changes made in the European insurer’s solvency regime around 2002 which stemmed from solvency principles put in place during the 1970’s. The driver behind all these changes is SOLVENCY i.e. the need to avoid business failures, capital inadequacy, insolvencies, poor management and governance. Next edition: Solvency and SAM References: Lloyds, EMB Consulting, AonBenfield & the WWWeb