A member of the Old Mutual Group 1 Integrated FAIS presentation Insurance Institute of Gauteng Forum Wednesday, 19/05/2010

2 Agenda FAIS Fit & Proper – Back to Basics FAIS Fit & Proper – Requirements Industry Forum Recommendation - WOP Honesty & Integrity Competence – Experience Competence – Qualification/s Competence – Regulatory Exams Continuous Professional Development Working Under Supervision Questions

3 FAIS Fit & Proper – Back to Basics Inception Date – 30/09/2004 FAIS Act FSP FAIS Category I Category II Category III Category IV FSPFSP Range of subcategories/financial products Discretionary and Hedge Fund Administrative/Investment Service Providers Administration of Assistance Policies FSP Key IndividualRepresentative Appointed FSP Approved FSB Manage/Oversee rendering of financial services Appointed FSP Advice and/or render intermediary services

4 FAIS Fit & Proper – Requirements Representative CompetenceHonesty & Integrity CPD Experience Qualification/s RE Transitional

5 Industry Forum Recommendation Academic QualificationProfessional Standards STANDARDS IISA:SGB Fundamental, Core, Elective Unit Standard Based Qualification Level 2 Level 3 Level 4 Level 5 Level Higher Education (Whole Qualifications) INSETA UNISA IISA:QA role (120) HC Licentiate (120) D Associate (120) AD Fellow Minimum RequirementsExperienceDesignationCPD Cap-stone assessment Assignments Articles Exam Assignments Articles Exam Assignments Articles Exam Assignments Articles Exam Board Exam (4) Board Exam (5) Board Exam (6) Board Exam (7) Practical Compliance Vocational Hours Practical Compliance Vocational Hours Practical Compliance Vocational Hours Practical Compliance Vocational Hours T L A F Professional Membership CPD CPD CPD CPD SAQA IISA

6 Honesty & Integrity Personal characteristics Guiding Principles:  Found guilty by court of law of criminal offense (5years prior)  Found guilty by statutory or professional body of negligence/incompetence  Denied membership of statutory or professional body  Found guilty on any misconduct by regulatory or supervisory body  Refused/suspended authorisation to conduct business by such body  Withdrawal/suspension of license by such body  Disqualified from participating in management activities of any company  Financial Sector Charter/BEE Codes Checks and escalation

7 Competence - Experience Hands-on (active and ongoing) in subcategory Short Term Insurance Personal Lines – 1 year (6 months) Local or abroad / under supervision or not / simultaneously across sub categories Intermittent periods allowed – within 5 years of application Board Notice 60 of 2010 – P. 6 – see link Board Notice 60 of 2010 – P. 6

8 Competence – Qualification/s List of Recognised Qualifications – create hyperlink FSB Matrix FSB Part Qualification Recognition FSB Application – Tertiary other Integrated Framework & Timelines – see link Integrated Framework & Timelines

9 Competence – Qualification/s continued Important Notice regarding FSB:  does not quality assure or does programme approvals – SAQA  does not accredit Training Providers – SETA/HETI  determines qualifying criteria for Fit & Proper only  compares qualification (SETA/SAQA approved) to qualifying criteria to determine if appropriate  Publishes and maintains list of qualifications

10 Competence – Regulatory Exams RE 1 – All (KI and Reps) and focuses on regulatory framework RE 2 – Only Reps (Not KI except if dual role) and focuses on Product specific RE 2 exemptions based on Qualification 2004 – 2009  RE 1 – 31/12/2011  RE 2 – 31/12/ onwards  RE 1 – within 2 years after appointment  RE 2 – within 6 years after appointment Examination Bodies  The South African Institute of Financial Markets  Leselo  The Financial Planning Institute  Moonstone Examination Bodies Matrix - see link Examination Bodies Matrix Trial Exams and pilot Learning Material RE 1 – see link Learning Material RE 1 Assessment Techniques

11 Competence – CPD Requirements Why CPD? IISA Framework and Application 3 year cycle – commencing after completion of highest RE (notional hours) Courses, conferences, seminars, subject matter workshops, self studies (online, CBT, LCT – assessments) Studies as part of Qualifications (required vs. additional) Recognition – Industry associations/Statutory -/Professional bodies/Accredited Providers/Employers/HETI FSB Gazette – 12/05/2010 – see link FSB Gazette – 12/05/2010

12 Competence – Working Under Supervision Covers Experience, Qualification and RE – max 6 years Direct vs. Ongoing Register and operational ability Key Individual/Representative who meets Experience requirements Active working relationship (oversight activities) Type of activities Supervision Agreements

13 Questions