1. Retirement Benefit Fund, Trustee and Third Party Provider Insurance
Teri Solomon

2. The Main Roleplayers The Fund Auditors The Trustees Actuary
Asset Manager/
Consultant
Administrator
Auditors
Actuary

3. The Fund’s Insurance
The Fund is covered against loss of fund assets as a result of:
Errors and omissions
Theft and fraud
Third party computer crime
Trustees, Committee Members and Principal Officers are covered for their:
personal liability cover in the event of, inter alia, breach of their fiduciary duties

4. The Fund’s Insurance
Loss to the Fund as a result of a Wrongful Act by an “Officer” of the Fund.
Damages, judgments, settlements, costs and expenses awarded against the Insured
Legal costs
All costs and expenses incurred require written consent of the Insurer

5. Some NB Extensions Advancement of Defence Costs (IFA Funds)
Carveback for 3rd party provider claims (10% sub-limit) (IFA, AMPLATS)
Extended run-off cover for past trustees (36 months).
Adjudicator claims deemed notified from date of first ruling
Cost of reinstating records
Unidentified Officer extension
Claims preparation costds
Mitigation costs (10% sublimit) (IFA Funds)
Regulatory Enquiry Costs (10% sublimit) eg FSB /SARS
Data protection extension
Impersonation Fraud

6. Basic Insurance requirements for The Administrator, The Asset Manager and the Actuary and the Auditor
The Risk
Errors/omissions in the performance of the services – Legal Liability
Theft/fraud of own and third party managed funds by employees
Legal Defence and other costs in respect of claims made
Third Party computer fraud - Theft/Fraud of third party assets under care custody and control
Loss of member data following a cyber breach
Personal Liability of the Directors and Officers of the Administrator
The Insurance
Professional Indemnity – legal liability based
Commercial Crime incl Social Engineering
Legal defence and other costs
Third Party Computer Fraud
Cyber Liability Insurance
Directors and Officers Liability Insurance

7. Typical Exclusions
Fraudulent claims, late notification and material non disclosure
Known circumstances
Circumstances arising prior to the retroactive date
Bodily injury, death, loss of property or destruction therefor
Failure of investments to perform
Fines and Penalties (unless insurable in law)
Other Insurance / More specific insurance

8. The IFA Fund Trustees V the PFA (2018) – Insurance lessons
Adjudicator Ruling
Insurance Response
No claim made against the fund hence no Loss
Mitigation Costs
Premium not paid
Ask for proof/confirmation
Policy cancelled due to misrepresentation and non disclosure and specific matters exclusion relating to the financials
Round Robbin the Proposal form and never allow the Administrator to sign off.
Beware subjectivities and SME’s
Dynamique - R1m PI cover
Must vet the insurance arrangements of all 3rd party providers
Indemnity clause in the rules
Advancement of costs language
No Costs order
The insurance should have covered this

9. The Amplats Group Provident Fund V Others
2018 – Adjudicator holds the actuary to the fund liable for a R40m pricing error, exonerates the trustees and the administrator of liability
Adjudicator Ruling
Insurance Response
Actuary liable due to negligent performance of his duties – R1m PI cover
Professional Indemnity limit wholly inadequate
Trustees did not breach their fiduciary duties
Legal defence and other costs should be advanced with no deductible
Administrators SLA did not extend to the administrator checking pricing errors
Contractual dispute – Administrators PI cover not affected.

10. MJ Matsheka & others V Mafikeng City Council Pension Fund 2016
Adjudicator Ruling
Insurance Effect
Deputy PO appointment invalid
Claims made against this individual will not be covered
Lack of published financials a breach of law
Breach of law not covered
Board failed to carry out its duties to members
No renewal or punitive renewal terms with specific matters exclusion
Maladministration and lack of member communication
Failure to disclose may void the policy ab initio – will render the fund in breach of the Act

11. Lessons for Trustees Vett the SLA with ALL third party providers
Make the insurance compulsory in the SLA
Obtain an independent review of the insurances – quantum and scope
Request annual confirmation of cover and premium paid
Ensure trustees are happy any indemnity in the rules
Ensure trustees understand the Fund’s insurances and the terms and conditions
Be prepared to provide evidence of how the Limit was selected
Claims should be a board agenda item and renewal should be round robined

12. THANK YOU