Regulatory Alerts2019-12-13
Retail Distribution Review Intermediary Activity Segmentation and Related Matters December 2019
The Financial Sector Conduct Authority (FSCA) issued this December 2019 update to communicate findings from its intermediary activity segmentation analysis and outsourcing notifications, which reveal significant duplication in intermediary remuneration across South Africa’s insurance sector. The regulator requires insurers to exercise robust oversight of policyholder fee deductions under Rule 12.4 of the Policyholder Protection Rules to prevent double remuneration, while clarifying the delineation between advice, binder functions, and outsourced services. Future regulatory interventions will refine activity definitions, replace current outsourcing notifications with an approval process, introduce fee caps for policy data administration, and establish enhanced conduct standards to mitigate conflicts of interest and improve customer outcomes.