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Long Term Insurance Act, 1998 (Act No. 52 of 1998)

Part VII : Business practice, policies and policyholder protection

Business practice

46. Policy to be actuarially sound

 

1) A long-term insurer shall not—
a) enter into any particular kind of long-term policy unless the statutory actuary is satisfied that the premiums, benefits and other values thereof are actuarially sound;
b) make a distinction between the premiums, benefits or other values of different long-term policies unless the statutory actuary is satisfied that the distinction is actuarially justified; or
c) award a bonus or similar benefit to a policyholder unless—
i) it is done in accordance with the principles and practices of financial management of the long-term insurer; and
ii) the statutory actuary is satisfied that it is actuarially sound and that a surplus is available for that purpose.

 

2) For the purposes of subsection (1)(c)(i) "principles and practices of financial management" means a statement approved by the board of directors of the long-term insurer setting out the discretion retained by the board of directors and the parameters within which that discretion must be exercised in respect of long-term policies where the long-term insurer has to exercise its discretion in awarding a bonus or similar benefit.