Consumer Protection Measures in the New and Developing Regulatory Framework for the South African Insurance Industry

Abstract

The financial services industry in South Africa is often perceived as guilty of unfair prejudicial practices. To curb this perception, the government has introduced several new legislative measures, specifically in insurance law.

This research paper will examine consumer protection measures in the insurance industry's new and developing regulatory environment. This investigation aims to provide an answer to the following research question: "How will the proposed regulatory framework impact consumer protection in the insurance industry"? Several Ombud determinations and High court judgements indicated that consumers need regulatory protection.

The Twin peaks regulatory model will be compared with preceding legislative measures. Historically speaking, South African insurance law was significantly influenced by the legal systems of other countries, such as the United Kingdom. Given this said history, a comparative analysis of South African insurance law and. The UK system is essential - to see how we can improve our existing legislative framework.

Treating Customers Fairly (TCF) principles are an essential feature of the new regulatory framework in South Africa. The said principles clearly indicate what is expected from insurers when dealing with their customers. This study seeks to determine whether the new regulatory framework is likely to improve the protection that consumers and policyholders enjoy.

The findings of this study will show whether the Twin-Peaks model is likely to encourage and ensure a fair, safe and stable insurance market and achieve one of its primary goals, namely, to protect consumers in the insurance sector. In addition, the study aims to assess whether the current legal environment will lead to higher levels of integrity, fairness, transparency, and meaningful disclosure in the industry.