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Susan Hunt The South African Insurance Industry Survey 2016 | 87
Associate Director, Regulatory and reporting requirements -
Financial Risk Management
Tel: +27 71 686 4968 Insurance and Banking Sector
Email: susan.hunt@kpmg.co.za
Regulatory and reporting requirements are likely to be very A further added complexity can be insurance standards
high on management’s agenda for the foreseeable future, applying to traditional non-insurance entities (where for
taking considerable time, budget and resources across the example the FSB could consider a predominantly banking
organisation. The objectives underpinning all the current and group to fall under insurance supervision) or where a banking
upcoming change cannot be argued with, these are: group owns insurance businesses.
–– better risk, governance, protection of policyholders and For requirements already effective (BN158) and soon to
the ability of management to make risk-based, real time be effective (CBRs and SAM), it is likely that there will be
business decisions on the regulatory side; and significant ongoing remediation and improvement over a few
years before companies fully comply and see true business
–– consistency, transparency and better alignment to an value.
economic risk-based view for reporting for stakeholders to
understand results. An Effective Insurance Enterprise Risk Management
Framework (ERMF) – Does the current regulation get us
It will be easy to get lost in the complexity of the numerous there?
requirements from all these changes and deliver something SAM is a risk-based regulatory regime for the prudential
that misses the mark and does not deliver adequate business regulation of both long-term and short-term insurers and is due
value, particularly if delivery programmes are developed to become effective on 1 January 2017.
independently rather than holistically,
The overriding objective of SAM is encapsulated in the Own
For Banks, G-SIBs (global systemically important banks) had Risk and Solvency Assessment (ORSA) which is defined as:
to comply with BCBS239 by 1 January 2016, D-SIBs (domestic
systemically important banks) by 1 January 2017, and IFRS 9 “the entirety of the processes and procedures employed to
has an implementation date of 1 January 2018. identify, assess, monitor, manage, and report the short and
For Insurance companies, BN158 had an implementation date long term risks an insurance undertaking (and group) faces
of 1 April 2015; BN158 of 2015 was to be applied by or may face and to determine the own funds necessary to
1 September 2015; Conduct of Business Returns (CBRs) need ensure overall solvency needs are met at all times; sufficient
to be submitted in the second half of 2016; SAM has to achieve its business strategy (including being within the risk
an implementation date of 1 January 2017; and IFRS 4 Phase 2 appetite and risk tolerance) and aligned to business planning
will be effective after 1 January 2018 (following IFRS 9). horizon.”
