Day: July 26, 2022

Insurers need proactive management of risks if they are to provide the safety net required by the country’s economy and society at large, says South Africa Reserve Bank (SARB) Governor, Lesetja Kganyago.

“In this regard, strengthening risk management within institutions, as well as our collective thinking on mitigation of emerging risks, will be crucial,” he said.

The Governor made the remarks while delivering the keynote address at the African Insurance Exchange 2022 Annual Insurance Conference on Monday.

“The financial sector as a whole has remained resilient, despite the multiplicity of shocks over the past two years. The Prudential Authority (PA), much like many of you at this conference, remains resolute in contributing to the resurgence, resilience and revival of the insurance sector through clear supervisory guidance and providing regulatory certainty,” said Kganyago.

In this regard, he said the SARB would continue to collaborate with the Financial Sector Conduct Authority and industry associations to enhance the resilience of the sector.

In his address, Kganyago reflected on the major risks that the non-life insurance sector has had to face in recent years, including the unprecedented COVID-19 pandemic, the July 2021 unrest and the damaging floods.

On the pandemic, he said the lockdowns brought with them a series of new challenges to the non-life insurance sector and tested the provisions of business interruption insurance.

“The impact of the pandemic on businesses meant a significant increase in claims, which did not relate to physical damage. From a non-life insurance perspective, this was a big challenge that resulted in regulatory uncertainty.

“Due to the various legal interpretations of these business interruption policies, legal certainty had to be provided by the South African courts. It would not be an exaggeration to coin this as a significant misstep in managing insurance risk, which had a significant reputational consequence for the non-life insurance sector,” Kganyago said.

In progressing to obtain legal certainty, a small number of non-life insurers provided interim payments to support struggling sectors.

The Governor said the PA would continue to monitor the payment of business interruption claims. Furthermore, he said the SARB had also observed the total withdrawal of non-physical damage business interruption cover in South Africa, which created a significant insurance protection gap.

July 2021 unrest 

Last July, as the country began to recover from the effects of the pandemic, a wave of violent unrest struck KZN and parts of Gauteng. This was characterised by widespread looting of businesses, and the burning and destruction of public facilities and private property.

In this regard, insurance claims in excess of R30 billion were recorded by the South African Special Risks Insurance Association (SASRIA), Kganyago said.  

“The non-life insurance sector must be applauded for its collaboration with and support to SASRIA, especially in assisting to expedite the claims process and to ensure economic activity was restored.

“Unfortunately, not all businesses have resumed to full or even partial activity following the riots. Of concern was the significant number of affected businesses that were uninsured or under-insured and many were forced to shut down their operations,” he said.

Some lessons from these events, and which require further work, include:

• improved consumer education initiatives that clearly spell out what is covered and what is excluded under an insurance policy;

• clear proposals to address the insurance and risk protection gap, not only as a sector but also in partnership with government; and

• the development of insurance products and solutions that take into account this changing landscape.

Current economic outlook 

The domestic economy experienced rapid growth during 2021, after a sharp contraction in 2020.

The Governor said despite the steep contraction in GDP during the third quarter of 2021 due to the riots in KwaZulu-Natal, the domestic economy grew by 4.9% during 2021.

“GDP growth, which would have surpassed pre-COVID-19 levels in the first quarter of 2022, was hampered by the January and March 2022 floods in KZN, the sharp correction in commodity prices and intensified load-shedding. The SARB forecasts GDP growth of 2% in 2022 and 1.3% in 2023,” he said.

In response, the SARB’s Monetary Policy Committee moved to normalise rates, raising the repo rate by a cumulative 200 basis points since November 2021.

Beyond this, Kganyago said the SARB had in recent years had to deal with operational and information technology risks (including cyber-risk) and climate-related risks and opportunities. 

Source: South African Government News Agency

The Portfolio Committee on Women, Youth and Persons with Disabilities has described the appointment of Justice Mandisa Maya as the Deputy Chief Justice as a giant and notable step in the fight for gender equality in South Africa.

“Judge Maya is a capable judge, who without a doubt will advance the interests of justice and of women in the judiciary,” committee chairperson, Nonhlanhla Ncube-Ndaba, said.

President Cyril Ramaphosa appointed the current Supreme Court of Appeal (SCA) President, Justice Maya, as the Deputy Chief Justice with effect from 1 September 2022.

The committee congratulated Maya on her appointment, and commended President Ramaphosa for recognising Maya’s talent, not only as a judge, but also as a court administrator.

Justice Maya is the first Judge who is a woman to be appointed as Deputy Chief Justice of the country.

Ncube-Ndaba said Maya will add new value to the transformation of the judiciary and will be a symbol of hope to South African women.

“We are hoping that President Ramaphosa will appoint a woman to fill the vacancy left by Justice Maya at SCA,” Ncube-Ndaba said. 

Maya was one of four candidates who were interviewed for the position of Chief Justice when the position was left vacant following the retirement of Justice Mogoeng Mogoeng. 

Source: South African Government News Agency

National Prosecuting Authority (NPA) Director Shamila Batohi on Monday confirmed that a formal extradition application has been submitted to the Central Authority in the United Arab Emirates for the extradition of the Gupta brothers.

The brothers were arrested in the United Arab Emirates (UAE) last month. They are wanted by the South African authorities to answer to charges of fraud, corruption and money laundering.

“The application, submitted in both English and Arabic, addresses the general requirements for extradition which, if met, would allow the extradition to be granted under either the existing Extradition Treaty or the UN Convention Against Corruption (UNCAC), or both,” Batohi said.

Addressing the media in Pretoria, Batohi said a multi-disciplinary team within the NPA led the legal aspect of the process and worked in a focused and well-coordinated manner with the Office of the Director General of the Department of Justice and Constitutional Development, designated as the Central Authority (CA) for extradition processes to prepare and finalise the application.

“The NPA team, in close collaboration with the office of the CA, worked relentlessly and focused on complying with legal requirements of the Extradition Treaty and UNCAC,” Batohi said.

Batohi said the submission of the formal application request for the arrest and extradition of the Gupta brothers is an important milestone in the NPA’s commitment to hold accountable perpetrators of State Capture and uphold the rule of law.

“It reaffirms our resolve to be the lawyers of the people and seek collective justice for our country,” Batohi said.

She explained that as the process unfolds, and the extradition application is heard in UAE courts, the NPA will continue to collaborate and support its counterparts in the UAE to ensure that the Gupta brothers are extradited to face justice in South Africa.

“The country demands this of us, and we are ready to keep moving to bring justice,” she said.

Speaking at the same media briefing, Justice and Correctional Services Minister Ronald Lamola said he is confident that the teams handling the extradition of the Gupta brothers, among other high-profile accused persons, are up to the task.

“The matter is now with the central authority in the UAE, who are then going to process it in their jurisdictions, which will obviously include processes and courts to determine whether the Gupta brothers are extraditable to South Africa and when a court has made that ruling. It will then be for the Minister of justice in the UAE to make the decision,” Lamola said.

Source: South African Government News Agency

President Cyril Ramaphosa has proudly congratulated Professor Tshilidzi Marwala on his new appointment as the Rector of the United Nations University.

In an announcement made by the United Nations on Monday, Professor Marwala’s appointment is with effect from March 2023 in Tokyo.

Prof Marwala is currently the Vice-Chancellor of the University of Johannesburg and the Deputy Chair of the Presidential Commission on the Fourth Industrial Revolution (4IR).

“The President describes this appointment as well deserved, referring to Prof Marwala as an accomplished intellectual, having obtained numerous academic qualifications from various universities nationally and internationally and having held various key roles in the global academic landscape for development,” the Presidency said in a statement.

The President further expressed appreciation to Prof Marwala for his noble contribution to the country’s knowledge base.

“The President wishes him great success in his new role, where he is confident that Prof Marwala will fly the South African flag higher and further,” the Presidency said. 

Source: South African Government News Agency