South Africa’s Prudential Authority (PA) and Financial Sector Conduct Authority (FSCA) published a guidance note on 30 August providing further clarity on the definition of a foreign captive insurer insuring first party risks and conducting insurance business in the country.
The note states that a “captive insurer” is an insurer that is only insuring the operational risks of the group of companies of which the insurer is a apart, any associate of the a company that is part of the group, or any joint arrangement that a company that is part of the group of Companies.
Having provided these definitions the guidance goes on to state that in most cases foreign captives insuring South African businesses will need to be licensed. Captives can apply for an exemption from licensing, but can only submit this request alongside a licensing application.