South Africa’s FSCA issues press release setting out latest stance on business interruption insurance

On 24 July 2020, the Financial Sector Conduct Authority (“FSCA”) in South Africa published a press release to delineate the outcome of its recent discussions with insurers that are most affected by business interruption insurance claims. This article provides an overview of the press release and addresses the impact on business insurance cover.

The FSCA issued a press release entitled “FSCA’s latest stance on Business Interruption insurance cover” (“Press Release“) on 24 July, 2020 (click here to view the Press Release[1]).

The discussions between the FSCA and the Prudential Authority (“the Authorities“) with affected non-life insurers, were directed at addressing two primary concerns of the FSCA, namely the impact of the repudiation of contingency business interruption cover claims by some non-life insurers (and delays in processing policyholders’ claims) and the impact of such on the reputation of the non-life insurance industry.

In the Press Release, the Authorities record that an understanding has been reached with non-life insurers that are most affected by business interruption insurance claims that such insurers will consider paying interim relief to their policyholders who have the appropriate contagious disease extensions, while legal certainty on this matter is being sought from the courts.

The FSCA iterates in the Press Release that the interim relief contemplated will differ from case to case having regard to various factors including reinsurer support, financial impacts and the number and types of policyholders.

Notably, the Authorities have established principles to be applied as a guide in determining the interim relief payable, namely:

  • At a minimum, the interim relief should focus on those businesses most impacted by lockdown (e.g. the hospitality industry) and small businesses;
  • Should the courts decide in favour of insurers, the funds provided to a policyholder as interim relief must not be claimed back by any non-life insurer from a policyholder;
  • Should the courts find in favour of policyholders, that which is provided to a policyholder as interim relief will be deducted from the total claim amount payable to a policyholder by a non-life insurer; and
  • The relief should be either on an interim basis pending legal certainty, or should non-life insurers wish to offer a full and final settlement (as opposed to an interim payment), such settlement should reflect reasonable value to a policyholder and the implications thereof should be clearly explained in writing in the event that a policyholder wishes to accept the settlement on this basis.

The Authorities consider the interim relief as a necessary and appropriate interim response to the current situation of legal uncertainty.

In addition, the Press Release sets out that the Authorities have agreed with most of the non-life insurers that, despite the time barring clauses in the business interruption insurance policies, these insurers would not raise the defence of prescription should policyholders decide to institute court proceedings against non-life insurers at a later stage.

However the Press Release recognises that for reinsurance purposes, non-life insurers may require policyholders to lodge their claims before certain dates and the Authorities encourage policyholders, their brokers and legal representatives to co-operate with non-life insurers in this regard.

The exact details of the interim relief measures implemented by insurers will be communicated directly by each insurer to their respective policyholders and brokers.

Further, the Press Release states that the Authorities will continue to work with the non-life insurers that are most affected by business interruption insurance claims to ensure that such claims are resolved timeously and to ensure that trust and confidence in the non-life insurance industry is restored.

The Press Release follows the recent press release dated 9 July 2020 (click here to view our related newsflash[2]).


  1. ^ click here to view the Press Release (
  2. ^ click here to view our related newsflash (

Source URL: Read More
The public content above was dynamically discovered – by graded relevancy to this site’s keyword domain name. Such discovery was by systematic attempts to filter for “Creative Commons“ re-use licensing and/or by Press Release distributions. “Source URL” states the content’s owner and/or publisher. When possible, this site references the content above to generate its value-add, the dynamic sentimental analysis below, which allows us to research global sentiments across a multitude of topics related to this site’s specific keyword domain name. Additionally, when possible, this site references the content above to provide on-demand (multilingual) translations and/or to power its “Read Article to Me” feature, which reads the content aloud to visitors. Where applicable, this site also auto-generates a “References” section, which appends the content above by listing all mentioned links. Views expressed in the content above are solely those of the author(s). We do not endorse, offer to sell, promote, recommend, or, otherwise, make any statement about the content above. We reference the content above for your “reading” entertainment purposes only. Review “DMCA & Terms”, at the bottom of this site, for terms of your access and use as well as for applicable DMCA take-down request.

Acquire this Domain
You can acquire this site’s domain name! We have nurtured its online marketing value by systematically curating this site by the domain’s relevant keywords. Explore our content network – you can advertise on each or rent vs. buy the domain. | Skype: TLDtraders | +1 (475) BUY-NAME (289 – 6263). Thousands search by this site’s exact keyword domain name! Most are sent here because search engines often love the keyword. This domain can be your 24/7 lead generator! If you own it, you could capture a large amount of online traffic for your niche. Stop wasting money on ads. Instead, buy this domain to gain a long-term marketing asset. If you can’t afford to buy then you can rent the domain.

About Us
We are Internet Investors, Developers, and Franchisers – operating a content network of several thousand sites while federating 100+ eCommerce and SaaS startups. With our proprietary “inverted incubation” model, we leverage a portfolio of $100M in valued domains to impact online trends, traffic, and transactions. We use robotic process automation, machine learning, and other proprietary approaches to power our content network. Contact us to learn how we can help you with your online marketing and/or site maintenance.