- Local policies are not required to be issued but are recommended for compulsory classes.
- Direct assured business (without a local intermediary) is permitted.
South Africa
Trading rights in South Africa
Lloyd's Permissions
Licensed
Restrictions: Motor TPL. Workers' compensation / Medical and funeral expenses. Certain Personal lines (see Crystal+ for detail)
Doing multinational business in South Africa
Key information
Intermediaries
Local Brokers
Intermediaries in South Africa need to be registered under the FAIS Act.
For business originating in South Africa Lloyd’s require local brokers to be approved as Open Market Correspondents (OMCs) by the local Lloyd’s representative.
Lloyd’s Brokers
If a Lloyd's broker does not provide intermediary services or advice for South African clients/in relation to a South African policy/risk they do not need to be registered under the FAIS Act.
To ensure alignment with the FAIS Act, the obligation to hold a FAIS licence is based on whether financial services—as defined in the Act—are rendered to a South African client, rather than on the physical location of the broker.
In practice, this means that if a Lloyd’s broker in London provides advice or intermediary services in relation to a South African policy or to a client situated in South Africa, those activities would fall within the scope of the FAIS Act, even if the broker is located outside South Africa.
Limitations are imposed by the Short-term Insurance Act and the Regulations on the commission which can be provided by a Lloyd’s underwriter / broker to an intermediary. (If the South African intermediary is the producing business, commission payable is 20% for non-motor business).
Wordings
Local law and jurisdiction must be South Africa.
Premium Payment
Local Brokers - Local Credit terms - local intermediaries have 15 days from end of the month in which the premium was received to instruct the local banks to pay the Lloyd’s broker.
Lloyd’s Brokers – Where no local intermediary is involved and placement is not 100% placed via Lloyd’s, exchange controls apply (MPI form requested by bank) Please see Crystal+for details). If business is 100% placed at Lloyds the MPI form is not required. To support premium transfer requests to the bank it is suggested that the Lloyd's broker provides a letter to the policyholder confirming that the risk is placed 100% at Lloyd's.
Claims
Local claims payments are permitted. Loss adjusters do not need to be locally registered or licensed.
Disclaimer:
These country profiles and Crystal+ are provided for information purposes; they do not constitute solicitation of business and are not intended to be a substitute for appropriate professional advice.