LOA PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY 2 SEPTEMBER 2008

CONSUMER PROTECTION The LOA and SAIA fully support legislation that is aimed at protecting consumer rights Financial institutions and financial service providers are comprehensively regulated under industry specific legislation, which contains a multitude of provisions aimed at the protection of consumers. Dispute resolution and redress- sector specific ombudschemes and “catch all” ombud - all regulated under the Financial Services Ombudschemes Act. Duplication of legislation (resulting in increased costs, confusion and possible contradiction) is not in the interests of the consumer.

CURRENT LEGISLATION Long Term & Short Term Insurance Acts which include specific Policyholder Protection Rules Financial Advisory and Intermediary Services Act (FAIS) –includes extensive Codes of Conduct Pension Funds Act (applicable to those insurers acting as pension fund administrators) Under these Acts FSB has supervision and enforcement powers which have been strengthened in recent Bill that has been passed. Creates an enforcement committee.

CURRENT PROVISIONS IN THE BILL In the definition of “service” insurance business (as regulated by the Long and Short Term Insurance Acts) is exempted from the application of the Bill, as well as “advice” given under FAIS. FAIS regulates “advice” and “intermediary services” so latter also needs to be inserted. Reason for this provision is that these Acts have provisions comparable to those in the Bill. However other Acts also have comparable provisions such as the CIS Act and the Pension Funds Act

REQUESTED AMENDMENTS Request that:: Paragraph(c)(ii) of the definition of “service” be deleted and a new paragraph 5(2)(c) inserted to provide: “ (c) if the transaction, or any activity incidental or related thereto, is regulated in terms of the Long-term Insurance Act, 1998 (Act No. 52 of 1998) or the Short-term Insurance Act, 1998 (Act No.53 of 1998)”. AND new sub-section 5(2)(d) be inserted: “ (d) if the transaction, or any activity incidental or related thereto, is regulated by the Financial Advisory and Intermediary Services Act 2002 (Act No. 37 of 2002), the Pension Funds Act 1956 (Act No. 24 of 1956), and the Collective Investment Schemes Control Act 2002 (Act No. 45 of 2002)

DEFINITION OF GOODS AND SERVICES Possible that financial product may be defined as ‘intangible product’ and fall under definitions of “goods”. To avoid confusion request that the definitions are made mutually exclusive and it is clarified that financial products/services fall under the definition of ‘services’ and not ‘goods’.

PRESENTERS (021) 509 4645 Contact details: Anna Rosenberg The Life Offices’ Association of South Africa Deputy Executive: Legal & Policy  (021) 421 2586 anna@loa.co.za Johann Davey Old Mutual Legal Executive (021) 509 4645 jdavey@oldmutual.com