Financial Institutions Amendment Act
STAATSKOERANT
VAN DIE REPUBLIEK VAN SUID-AFRIKA
REPUBLIC OF SOUTH AFRICA
GOVERNMENT -GAZETTE
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KAAPSTAD, 1 AUGUSTUS 1980
CAPE TOWN, I AUGUST 1980 [No. 7151
KANTOOR VAN DIE EERSTE MINISTER OFFICE OF THE PRIME MINISTER
No. 1526. ·· 1 Augustus 1980. No. 1526. 1 August 1980. _ .,
Hierby word bekend gemaak · dat ·die Staatspresident sy . It is hereby· notified that the State President has assented to goedkeuring geheg bet aan die onderstaande Wet wat hierby the following Act which is hereby published for general ter algemene inligting gepubliseer word:.;......; · · infonnation:-
No. 99 van 1980: Wysigingswet op Finansiele Instellings, No. 99 of 1980: Financial Institutions Amendment Act, ' 1980. 1980.
Please note that most Acts are published in English and another South African official language. Currently we only have capacity to publish the English versions. This means that this document will only contain even numbered pages as the other
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GOVERNMENT GAZETIE, 1 AUGUST 1980 No. 71.51 3
FlNANCIAL INSTITUTIONS AMENDMENT ACT, 1980 Act No. 99, 1980
GENERAL EXPLANATORY NOTE:
[ J Words in bold type in square brackets indicate omissions from existing enactments ..
Words underlined with solid line indicate insertions in existing enactments.
ACT. To amend the provisions of the Insurance Act, 1943, relating
to definitions; to provide for the appointment of an advisory committee on short-term insurance; and for the registration of insurers for home service business; relat- ing to the requirements as to the registration of new insurers; and to money or approved securities deposited with the Treasury; to abolish sinking fund business; relating to the power of the. Registrar· of Insurance to permit insurers to depart in certain circumstances from certain provisions ·or the said Act; and to the prohibition of certain practices or methods of conducting business; to prohibit certain conditional transactions; relating to unregistered former insurance concerns; to facilitate the amalgamation or transfer of insurance business in certain respects; relating to the amounts which may be paid out by an insurer upon the death of insured children under 14 years of age; and to funeral policies and industrial business; to amend the provisions of the Stock Exchanges Control Act, 1947, to provide for restrictions on the administration and custody of investments in listed securities on behalf of other persons; and to create .further offences; . to amend the provisions of the Unit Trusts Control Act, 1947, relating to the nature of the securities which may be included in unit portfolios; to provide for the amalgamation of unit trust schemes and portfolios and for the cession, transfer and take-over of the rights of holders of unit certificates; relating to the application of the Companies Act, 1973, to management companies; and to the application of the said Unit Trusts Control Act to South West Africa; to amend the provisions of the Pension Funds Act, 1956, relating to definitions; to the investments which may be held by registered pension funds; to the reduction, transfer and attachment of pension benefits; and to the disposition of benefits upon the death of a member of a pension fund; to amend the provisions of the Friendly Societies Act, 1956, relating to the amounts of the benefits which may be paid by a friendly society upon the death of insured children under 14 years of age; and to the investments which may be held by friendly societies; to amend the provisions of the Participation Bonds Act, 1964, relating to definitions;. to amend the provisions of the Banks ~ct, 1965, relating to definitions; and to the minimum capital and reserves, reserve balances and liquid assets to be held by a banking institution; and to provide that minors above 16 years of age and all married women may be . depositors with banking institutions and that they shall have certain other powers; to amend the provisions of the Building Societies Act, 1965, relating to definitions; to provide that building societies may also do business in connection with rights of
GOVERNMENT GAZETIE, I AUGUST 1980 No. 7151 5
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1980 Act No. 99, 1980
leasehold; relating to the power . of building societies to issue shares; and· .to the monthly· returns by building societies; and to make further provision in connection with the restrictions on the amounts which may be made as advances by building societies; and to provide for incidental matters •. · ·
(Afrikaans· t~xt signed by the State President.) (Assented to 1 July 1980;)
BE IT ENACTED by the State President, the Senate and the House of Assembly of the Republic of South Africa, as
follows:-
1. Subsection (1) of section 1 of the Insurance Act, 1943, is Am~ndment of 5 hereby amended- . . sectton 1 of
· b th b · · ~· b h (" ) f h ( ) Act 27 of 1943
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(a) y e su shtutton .or su paragrap 11 o paragrap a as amended ' of the definition of "approved reinsurances" of the by section 2 of
·following subparagraph: . . . Act_73 of 1951, ' "(ii) in the case of life [and sinking fund] business, section 39 of
. fti d . h firs d f Act 24 of 1956, any remsurances e ecte pnor to t e t ay o section so of · January, 1952, and· relating to policies issued Act 25 of 1956, before · that date; and any other reinsurances spe- section I of cially approved by the registrar in exceptional Act _79 of 1959, . f th . section I of crrcumstances at the request o e msurer con- Act 10 of 1965
cemed; and"; . . section 1 of ' · (b) · by the substitution for the definition of "funeral policy" Act.4I of 1966,
f th ~ II · d fi · · section 1 of o e 10 owmg e muon: . . · . A t 6S f 1968 .. 'funeral policy' means a policy, if application therefor se~tion ~ of •
was made before the commencement of the Finan- Act .39 of 1969, ~~~~~=~;;.;;;..~~==:;=~~~"""":'-=":""" section I of cial Institutions Amendment Act, ··1980, whereby Act 91 of 1972, th · bl' · · ~ section 1 of e 1~surer assumes ~ o tgabon,_ m return ·~r a Act 101 of 1976, premiUm or the pronuse of a premmm, to provtde, section 1 of on the death of any person, benefits which involve Act 94 of 1977, amounts not exceeding .in the aggregate five section I of hundred rand and which consist principally of- Act 80 ~f 1978
• • · and section 1 of (a) proVISion for the funeral of that person; or Act 103 of 1979. (b) ·. the grant of some other non-monetary benefit
. to any person, . whether or not the policy provides for the payment,
at the option of the insurer or any other person, of a sum of. money in lieu of the provision of such funeral or the grant of such other non-monetary benefit, and whether or not it · provides for the
. payment of a sum of money in addition to the provision of such funeral or the grant of such other non-monetary benefit;";
(c) by the insertion after the definition of ' 'guarantee policy" of the following definitions: · "'home service business' means the business of assum-
ing the . obligations of an insurer under home service policies;
'home service policy' means a policy, if issued after the commencement of the Financial Institu- tions Amendment Act, 1980, whereby the insurer assumes such an obligation as is described in the definition of 'life policy' which, before any benefit contemplated in section 36 read with section 59 or any bonus is taken into account, does not exceed in
· value the sum of one thousand rand on any life
GOVERNMENT GAZETIE, 1 AUGUST 1980
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(d)
FINANCIAL INSTITUTIONS AMENDMENT ACT, 1980
insured under the policy, irrespective of whether the insurer has undertaken under the policy to send a person from time to time to the owner of the policy or to ·his residence or place of work to collect the premiums;"; .
by the substitution for· the definition of ''industrial policy" of the following definition: . "'industrial p(>Iicy'-'- · · · · , ·
(a) means a policy (other than a funeral policy), if - aPplication therefor was · made before the
commencement of the Financial Institutions Amendment Act. 1980, whereby the insurer assumes such an obligation as is described in the definition of [the expression] · 'life policy', not exceeding in value the sum of one thousand rand, in return for a premium or the promise of a premium payable from time to time at intervals not exceeding two months, if the insurer has expressly or tacitly undertaken to send a ·person from time . to time· to the owner· of the policy or to his residence or place of work to collect the premiums: Pro-
.. vided that the owner of the . policy and th insurer may . expressly agree, after the sai commencement, on another manner of pay- ment of the premiums; .
(b) . includes a paid-up policy issued, after the said commencement, in tenns' of section 62 (2) in the place of a policy referred to in section 62 (2) (b);";
(e) by the substitution for· the definition of "life policy" of the following definition: "'life policy' means a: policy whereby the· insurer
assumes (in return for the· payment or the promise 35 of the payment of. a sum or sums of money) an
obligation to pay to a particular person certain sums of money at specified intervals, or a certain sum of money or to provide for a . particular person a certain other'benefit- . .
40 (a) on theoccurrence of the death of a particular person or on the occurrence of the birth of a child to a particular person at any time or within a specified period; or
(b) in . the event of a particular person continuing 45 · to live throughout · a specified period or
specified periods; or a policy whereby the insurer assumes any obligation in return for a promise of a periodical payment of a certain premium- · . ·
50 (i) until the occurrence of the death of a particular person; or
(ii) during the specified period . or until the occurrence of the death of a particular person before the expiration of that period;
55 and the expression 'life policy' includes- iE!!.l.. any contract of insurance which is customarily
regarded as a life insurance contract; .;;;an;,;;d:...-.. (bb) any policy which does not exceed in value the
. . sum of one thousand rand on any life insured 60. under the policy provided that it shall not be
issued under the name 'home service policy' or that the insurer has not undertaken under the policy to send a person from time to time to the owner of the policy or to his residence
65 or place of work to collect the premiums; and a life policy or the insurer under a life policy shall, for the purposes of this Act, be deemed to
No. 7151 7
Act No. 99, 1980
GOVERNMENT GAZETIE, I AUGUST 1980 .No. 7151 9
FINANCIAL INSTITUTIONS AMENDMENT ACf, · 1980 Act No. 99, 1980
insure the life of the person upon whose death or upon the continuance of whose life the obligation of either party to the policy is contingent; but the expression . 'life policy' does not include an indus-
5 . trial policy or a funeral policy or . a personal accident policy or any other insurance policy under which such a contingent obligation as hereinbefore in this definition · described, fonns . a subordinate part ·of the . insurance . effected by . that other
10 , policy;"; . · · · · · . ·· · · (f) . by the substitution for . the definition of "long-tenn
insurance business" · of .the following definition: "'long-tenn insurance business' means any life busi-
ness, industrial . business, funeral business or .15 [sinking fund] home service business;";
(g) by the substitution for the definition of "policy" of the following defini~on: ·
. . •• 'policy' means any valid insurance contract, whatever · may be the fonn in which the rights and obligations
20 of the · parties to the contract are expressed or created, and includes [(a) a sinking fund
· · · policy; and .. (b) , any · Statutory form . of bond, guarantee or undertaking in terms of which an
. insurer assumes an obligation ' as surety for the 25 . · discharge