Abstract:
The second draft of the Conduct of Financial Institutions Bill (“COFI”) is the last building stone in the newly-constructed Twin Peaks regulation model for the financial services industry. The Bill is set to replace the FAIS Act and, as such, will apply to financial services providers, including long-term insurers.
The research question of the dissertation is: Does COFI have any role to play in regulating market conduct in the life insurance industry? Put differently: will COFI add anything to the existing market conduct regulatory framework? Although it is certain that COFI will apply to life insurance, it is doubtful whether COFI will dramatically improve market conduct in this line of business.
Chapter two provides an overview of the current market conduct framework for the life insurance industry.
Chapter three makes a comparison between the current market conduct regulation for each phase of the product life cycle as derived from current legislation on the one hand and COFI on the other.
Chapter four investigates the determinations, enforcement actions and cases heard by the five fora that deal with insurance law matters in South Africa, in order to ascertain what the current market conduct issues in life insurance are, how prevalent those issues are, how successfully the current legislation and fora dealt with those issues, and then finally, whether COFI will be able to remedy any of those market conduct issues. This extensive review entailed an examination of 18 FAIS Ombud determinations (2005-2021), 88 FSCA enforcement actions (2016-2021), 23 final determinations by the Ombudsman for Long-term Insurance (2016-2021), 60 decisions by the Financial Services Tribunal (only for 2021) and 39 court cases (2017-March 2021). All these determinations, enforcement actions and cases were summarised and the relevant data was incorporated and analysed on an Excel spreadsheet.
Chapter five provides conclusions and recommendations.
