IN THIS ISSUE

Dear stakeholder

The processes of reforming South Africa’s social security framework has gained new momentum with the National Economic Development and Labour Council (Nedlac) spearheading a consultative process to achieve consensus on the proposals contained in the 2012 discussion document drafted by the Department of Social Development.

Following a lengthy process the discussion paper titled “Comprehensive social security in South Africa” was approved for release by Cabinet and tabled at Nedlac in November last year.

The Nedlac Task Team met at the beginning of April this year and agreed on a 12-month timeframe in which to commission research and engage on the proposals. It has been agreed by all constituencies that evidence based research will need to inform policy positions.

As a key stakeholder, ASISA has appointed a technical work group under the ASISA Economic and Savings Policy Board Committee. Members of this work group are also represented on the business advisory team at Nedlac.

The Department of Social Development met with ASISA in December 2016 following the release of the discussion paper and committed to participating in a joint workshop with ASISA in May. In addition, at the time of writing, a discussion had been scheduled for May at the National Planning Commission (NPC).

Government leadership is provided through an Inter-ministerial Committee on Comprehensive Social Security and Retirement Reform. The committee is chaired by the President and includes eight Ministers.

The Financial Services Board (FSB) published the revised template for the Insurance Conduct of Business Returns (CBRs) on 21 April 2017, reflecting feedback received from insurers.

The FSB has confirmed that insurers will need to submit their first set of returns for the reporting period January to June 2016 by the new deadline of 30 June 2017. The deadline for submitting the second set of returns has therefore also been extended from 31 July 2017 to 31 October 2017.

The FSB published the Draft Governance and Operational Standards for Insurers (GOI) on 24 April 2017 for comment by 26 May 2017. The Standards set out the high-level framework for assessing the governance and operational soundness of South African insurers that will be licensed under the Insurance Bill of 2016. The draft Standards can be downloaded here.

Following hearings on the constitutionality of a provision regarding warrantless searches, Parliament approved the amended Financial Intelligence Centre (FIC) Bill at the end of February. The Bill was then referred back to the President and signed into law on 26 April 2017. The consultation process to enable implementation can now begin.

The Davis Tax Committee is currently investigating the feasibility of introducing additional forms of wealth taxation, namely:

• A land tax
• A national tax on the value of property (over and above municipal rates)
• An annual wealth tax

In a media statement released towards the end of April, the Committee therefore invited all stakeholders to make submissions on the appropriateness of the proposed taxes by 31 May 2017. However, given the amount of research this submission requires, ASISA was granted an extension until 14 July 2017 to prepare its comments.

ASISA attended a constructive meeting with National Treasury, the South African Revenue Service (SARS) and the FSB last month to discuss tax issues arising from a number of regulatory changes currently impacting life insurers.

Topics raised included changes to Section 29A of the Taxation Laws Amendment Bill (TLAB), the implementation of the Solvency Assessment and Management (SAM) regime, and the transition to the new Risk Policy Fund (RPF). 

Hopefully the first draft of the 2017 TLAB will address some of the concerns raised. We expect further engagement with National Treasury during May.

ASISA is engaging with SARS for further clarification regarding amendments released in April to the IBIR-006 Tax Directive Interface Specification for tax reporting.

The Academy reported a strong uptake of its bespoke in-house learning programmes in April. The five-day Analysts’ Bootcamp for Investment Analyst trainees was presented at the Old Mutual Investment Group. For the third year running the Academy took Sanlam’s newest graduate employees on a two-day tour of the Financial Services landscape including detailed overviews of how life insurance and investment management companies operate.

The Academy held nine Retirement Fund Trustee Education workshops for individual pension funds including two large municipal funds and a university pension fund. There is a growing demand for these workshops, in particular the Death Benefits workshop.

April is generally a difficult month given the numerous public holidays that usually fall within this month. Nevertheless, the ASISA team was productive and kept the momentum going. I would like to thank my team for their commitment and dedication. A big thank you also goes to the member representatives who work tirelessly on the various committees.

Kind regards