Registrar of Long-term Insurance

Transcription

1 N i n t h A n n u a l R e p o r t o f t h e Registrar of Long-term Insurance 2006

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3 CONTENTS TABLE PAGE Report by the Registrar of Long-term Insurance 2 Names and addresses of registered long-term insurers 1 14 Transfers of long-term business 2 17 Policies for which long-term insurers were registered 3 22 Name changes of long-term insurers 4 25 Individual ranking 5 29 Individual market share 6 30 Net premiums received and outstanding 7 31 Net benefits paid and provided for 8 32 Movement in policyholder funds 9 33 Movement in shareholder funds Movement in the number of policies/schemes in force Assets Liabilities under unmatured policies Other insurance liabilities Summary of key figures Summary of key ratios Contact information 41 Long-term Insurance

4 REPORT BY THE REGISTRAR OF LONG-TERM INSURANCE TO FINANCIAL THE MINISTER STATEMENTS OF FINANCE I, the Registrar of Long-term Insurance, hereby submit the ninth annual report in terms of section 5 of the Long-term Insurance Act, 1998 (Act). The text of the report, as well as the information contained in tables 1 to 4, relate to the period 1 January 2006 to 31 December Tables 5 to 16 contain figures for long-term insurance companies with financial years ending during Industry Overview 1.1 General Net premium income for primary insurers increased by 32.3% during 2006 compared to an increase of 8.2% during The increase in premium income is again attributable to the high levels of credit growth in the household sector where credit life policies are taken out as protection against credit arrangements. Benefit payments increased by 29.4% compared to a 2.8% decrease for The excess of income over expenditure for primary insurers increased from R26.3 billion in 2005 to R34.1 billion in Assets showed an increase of 20.3%. The increase in the assets of primary insurers was mainly due to the strengthening of equity markets. The 2006-year reflected an increase in fixed interest, equity and collective investment schemes, and immovable property investments by long-term insurers. The ratio of assets to liabilities for primary insurers is 1.09 compared to 1.10 in Compliance with the Financial Sector Charter International financial reporting standards (IFRS), i.e. IFRS 4 the implementation of Phase 1 and the possible impact of the proposals in Phase 2: Valuation of insurance contracts Addressing the needs of the low income market for appropriate products Technology High terminations in fund and group policies Public confidence in the industry Matching of assets and liabilities, in particular long dated assets backing long-term contracts Effective management of capital Consumerism. The following challenges continue to face the long-term insurance industry: Compliance with regulatory requirements. This includes the introduction of new regulatory requirements dealing with minimum early termination benefits of policies, i.e. implementation of the Statement of Intent signed by the Minister of Finance and the major players in the long-term insurance industry The introduction of new regulatory requirements, i.e. change in commission regulations Increased competition 1 The financial years of long-term insurers do not end on the same date and may cover periods other than 12 months. 2 Long-term Insurance

5 REGISTRAR OF LONG-TERM INSURANCE 1.2 Financial summary Summary of the results of the primary long-term insurance industry: Primary insurers Change Change 04 to to 06 R million R million R million % % Income: Net premiums Investment income Other income (709) Total Expenditure: Benefits (2.8) 29.4 Management expenses Commission Other expenditure (44.7) Total (1.6) 31.0 Excess of income over expenditure Assets Liabilities Summary of the long-term business of reinsurers: Reinsurers Change Change 04 to to 06 R million R million R million % % Income: Net premiums Investment income (7.4) Other income (15) (61.0) Total Expenditure: Benefits Management expenses (2.4) 24.1 Commission (45.7) (10.8) Other expenditure (59.9) Total (1.7) Excess of income over expenditure Assets Liabilities Long-term Insurance 3

6 REGISTRAR OF LONG-TERM INSURANCE 1.3 Investment spread The spread and categories of assets for primary insurers and reinsurers for the long-term insurance industry were as follows: Kinds of assets R million % R million % R million % In RSA: Cash and deposits Fixed interest investments Equities and collective investment schemes Debentures and loan stock Immovable properties Fixed assets * Current assets Foreign (covering domestic liabilities) Foreign (covering foreign liabilities) * Total * Result is less than 0.5% but not necessarily 0%. 1.4 Excess assets to capital adequacy requirement The number of times the Capital Adequacy Requirement (CAR) is covered by excess assets gives an indication of the financial strength of a long-term insurer. The median for long-term insurers with a 2006 financial year-end for which data was available at the time of writing was 2.8 (2005: 2.93). The minimum requirement is one. All insurers with a CAR cover below one have been investigated and corrective measures have been implemented. The following table gives a breakdown, based on available unaudited data, of the excess assets to CAR for long-term insurers with financial periods ending during 2004, 2005 and 2006: Excess assets to CAR Number of insurers Covered 0 1 times Covered 1 2 times Covered 2 5 times Covered 5 10 times Covered 10+ times Total Long-term Insurance

7 REGISTRAR OF LONG-TERM INSURANCE 1.5 Primary insurance premiums Classes of policies These diagrams show the net premiums according to the classes of policies of primary insurers in and outside the Republic of South Africa during 2005 and 2006: 2005 Total R63 75 million 2006 Total R million Life 49.9% Life 41.3% Assistance 1.6% Sinking fund 2.5% Disability 1.5% Assistance 1.4% Sinking fund 2.3% Disability 1.2% Health 1% Health 0.9% Fund 43.5% Fund 52.9% Types of business in the RSA These diagrams show the net premiums according to the types of business in the Republic of South Africa of primary insurers during 2005 and 2006: 2005 Total R63 75 million 2006 Total R million Linked 55.4% Linked 55.4% Without-profit annuity 3.3% Without-profit annuity 3.3% With-profit annuity 1.3% With-profit business 9.7% Other 13.8% Marketrelated 16.5% With-profit annuity 1.3% With-profit business 9.7% Other 13.8% Marketrelated 16.5% Long-term Insurance 5

8 REGISTRAR OF LONG-TERM INSURANCE 1.6 Surrenders The chart below reflects the number of policies and the annualised premiums for surrenders of life business over the past five years. The figures exclude pension fund and group life business: 1.7 Lapses The chart below shows the number of policies and the annualised premiums for lapses of life business over the past five years. The figures exclude pension fund and group life business: Thousand (Y1) R million (Y2) Thousand (Y1) R million (Y2) Policies (Y1) Annualised premiums (Y2)* Policies (Y1) Annualised premiums (Y2)* * Annualised premiums refers to the amount of premium which must be paid annually to meet the contractual requirements of a policy. * Annualised premiums refers to the amount of premium which must be paid annually to meet the contractual requirements of a policy. Surrenders as a percentage of new business: Lapses as a percentage of new business: % % % % % Number of policies Annualised premiums % % % % % Number of policies Annualised premiums Long-term Insurance

9 REGISTRAR OF LONG-TERM INSURANCE 2. Economic trends in the insurance industry 2.1 Contribution to gross domestic product This graph shows the contribution by the long- and short-term insurance industries to the GDP from 1994 to 2006 (previous years percentages are sometimes adjusted by the South African Reserve Bank in their benchmarking and annual revision exercises): Percentage of GDP Source: South African Reserve Bank 2.2 The market capitalisation of the insurance sector on the JSE Limited The market capitalisation of the long-term insurance sector on the JSE Limited (JSE) amounted to R233.9 billion on 31 December 2006, or 4.64% of the total market capitalisation of the JSE. When Sanlam was listed on the JSE in December 1998 it contributed R19 billion to market capitalisation. When Old Mutual was listed on the JSE in July 1999 it contributed R45 billion to the market capitalisation. The graph shows the market capitalisation of the combined long- and short-term insurance sectors on the JSE since June 1995, as at 30 June each year until June 2004 and then from December 2004 as at 31 December each year: 300 R billion Jun 2004 Dec Source: JSE Long-term Insurance 7

10 REGISTRAR OF LONG-TERM INSURANCE 3. Regulatory and policy developments 3.1 Advisory committee The Advisory Committee on Long-term Insurance is a statutory committee appointed by the Minister of Finance to investigate and advise on matters relating to the long-term insurance industry. The committee held four meetings during the period under review. 3.2 Micro-insurance A working group comprising representatives from the Financial Services Board (FSB) and National Treasury has been constituted to determine the way forward for the regulation of micro-insurance, which includes assistance business and short-term insurance business. The National Treasury has appointed Genesis Analytics as the consultants and they have been tasked to draft a discussion paper on micro-insurance. It is envisaged that this discussion paper will be circulated to all interested stakeholders for comments, after which plans will be put in place for the future regulation of micro-insurance. The International Association of Insurance Supervisors (IAIS) issues globally accepted principles, standards and guidance papers for insurance regulation and supervision. The IAIS through its Implementation Committee has expressed support for insurance markets in establishing a sound insurance supervisory system. In order to give practical support the IAIS created a joint working group to address the issues of micro-insurance. One member of the Insurance division took part in a workshop arranged by the IAIS on micro-insurance in Hyderabad, India from 31 August 2006 to 2 September The objective was to share the experience of providing micro-insurance products to low income earners, to look at the regulatory barriers to insurers accessing these markets and to develop an IAIS guidance paper on micro-insurance. Visits to low income rural insurance projects which encompassed health insurance, asset insurance and life insurance formed part of the programme. 3.3 Statement of Intent (SoI) The previous report refers to the SoI that was signed in December 2005 between the Life Offices Association (LOA) and the Minister of Finance. This agreement addresses ways to enhance values and benefits of certain existing and new savings policies. It also addresses ways to retrospectively rectify poor benefits paid under investment policies where contractual changes took place, going back to 1 January The products identified are mainly retirement annuity policies, fund member policies, endowment policies and other savings policies excluding fund policies. The SoI also includes a commitment by National Treasury to examine other issues affecting costs, including commission structures, disclosure standards and consumer education. National Treasury took responsibility to convert the SoI into regulations with the assistance of the FSB. A regulatory workgroup and an actuarial workgroup were established to address the new regulations. Following an intensive process the draft regulations were made available for public comment during October The regulation was published on 1 December National Treasury proposed further enhancements to the prescribed minimum values of investment policies in cases where contractual changes are made. 3.4 Commission regulations special provisions concerning commission on replacement policies The introduction of the minimum values to be paid when contractual changes are made to investment policies necessitated the introduction of further regulatory requirements. These requirements relate to the payment of commission on multiple premium investment policies that are replaced. National Treasury and the FSB were concerned that there could be an incentive for intermediaries to convince policyholders to terminate their existing policies and replace them with other policies as the regulations will prescribe that policyholders must receive a minimum benefit. 8 Long-term Insurance

11 REGISTRAR OF LONG-TERM INSURANCE It was therefore decided to introduce special provisions regarding commission payments on replacement policies in the case of multiple premium investment policies. The new commission regulations prescribe that in the case of a replacement policy the same percentage commission must be applied to each of the premiums received on a multiple premium investment policy. No upfront commission payment is allowed in the case of a replacement policy. The new commission regulations on replacement policies became effective on 1 March Discussion paper on contractual savings in the life insurance industry On 30 March 2006 the National Treasury distributed a discussion paper, called Contractual Savings in the Life Insurance Industry. The key recommendations made by National Treasury in the paper are: Efforts to lower costs and improve effective competition Regulatory changes to reduce the possibility of product opaqueness and conflicts of interest in the governance of retirement annuity funds Measures to better align the incentive structure of intermediaries with the interests of the client Continued regulation of commissions until there is evidence that other measures such as disclosure, consumer education and competition are effectively protecting policyholders, with the regulated level and structure of the sales commission subject to certain conditions Measures to ensure an improved safety net for investors in cases where the investor reduces or discontinues contributions to a contractual savings product. The release of the discussion paper was followed by a timetable, dividing the project into three work streams which would be addressed over the short, medium and long term. Outcomes that have already been finalised are the regulation of minimum values in cases where contractual changes are made to investment policies and also regulations to disincentivise churning of policies. Regulations covering these matters have been published. 3.6 Insurance group supervision The Insurance division continues to perform reviews on insurance groups with the co-operation of the management of insurers. The reviews are performed on an annual basis except in the case of the five larger groups, in which case reviews are also performed on a quarterly basis. The Insurance division is continuing with its investigation of the introduction of a formal approach to insurance group supervision. International developments are closely monitored and researched in this regard. 3.7 Risk-based supervision During the period under review the Insurance division implemented its risk-based supervision framework. Initial risk assessments were done on all registered insurance companies. Staff was trained in 2006 and will undergo further training during the course of the following year to ensure continuous improvement in the supervision process. 3.8 Unclaimed benefits The Insurance division issued a questionnaire on unclaimed insurance benefits to the long-term insurance industry on 15 June The purpose of the questionnaire was to determine the quantum of unclaimed benefits in the long-term insurance industry. 22 long-term insurers responded that they have unclaimed insurance benefits. The collective amount is R1.6 billion. The respondents indicated that unclaimed benefits are: Transferred to a general reserve Kept as current liabilities or policy liabilities indefinitely Accounted for as income after a period of five years, however, the insurer will pay a valid claim because the claim does not prescribe Forfeited for the benefit of other participating policyholders after a period of five years Transferred to the Guardian s Fund after a period of five years or if an executorship is served by a magistrate. The Insurance division will analyse the responses and decide on the way forward. Long-term Insurance 9

12 REGISTRAR OF LONG-TERM INSURANCE 3.9 Cross border operations The Insurance division did a survey to establish the extent of cross border operations of registered insurers with a view to: Monitor the group operations of insurance companies; Identify those jurisdictions with which the FSB may need to co-operate; and Assess the key risks to insurance companies. Insurers were requested to provide information on their global activities and business conducted within the SADC region for their financial years ending in The information included reinsurance business conducted on a cross border basis. The annual statutory return will be amended to provide for this information. Name changes of insurers are indicated in table 4 of this report. 4. Directives and information letters issued 4.1 Directives The Insurance division issued the following directives: Subject Number Issue date Application of SA GAAP to the requirements Differences between the annual financial statements and the long-term insurance return 140.B.iii(LT) 10 March 2006 Governance of discretionary participation products 147.A.i(LT) 04 December Registrations, variation of conditions of registration, run-offs and dormant insurers, transfers, and name changes New insurers registered, run-offs of business and dormant companies are indicated in table 3 of this report. Two licenses were granted to new long-term insurers during the review period and no licence was cancelled. The license of one long-term insurer was amended to restrict it from conducting new business. This was as a result of the inability of the insurer to comply with the requirement to submit annual statutory returns and meet other requests for information. The application for the transfer of part of the business from Investec Employee Benefits Limited to Liberty Group Limited was approved by the High Court on 22 November Papers opposing the transfer by a number of pension funds that were filed with the High Court were withdrawn before the final hearing. 4.2 Information letters The Insurance division issued the following information letters: Subject Number Issue date Cross-border operations of insurance companies 1/2006(LT&ST) 10 April 2006 Service level commitments by the Registrars of Long-term and Short-term Insurance 2/2006(LT&ST) 20 December 2006 Requirements for minimum values where contractual changes are made to savings policies 3/2006(LT) 21 December 2006 The application for the transfer of the entire business of Metropolitan Odyssey Limited to Metropolitan Life Limited was approved by the High Court on 6 December All prior years transfers of business between insurers are indicated in table 2 of this report. 10 Long-term Insurance

13 REGISTRAR OF LONG-TERM INSURANCE 5. General information 5.1 Staff of the Insurance division of the Financial Services Board As at 31 December 2006 the staff complement of the Insurance division was as follows: Deputy Executive Officer 1 Heads of departments 3 Managers 6 Analysts 24 Specialist Analysts 2 Specialists 3 Administrative staff 6 Number % Black Female White Female 6 13 Black Male White Male Alleged contraventions of the Act Inspections The FSB requested one inspection on an entity that was alleged to have been conducting unregistered insurance business. This inspection has been finalised. The following table gives a breakdown of the cases that were inspected during 2005 and 2006: Activity Number of cases* In progress 0 0 Finalised 8 1 Total 8 1 * May include cases relating to prior years Prosecutions Two entities whose cases were closed by the prosecuting authorities for lack of sufficient evidence in the previous review period have been reopened at the insistence of the FSB. One entity which was conducting unregistered insurance business in KwaZulu-Natal province pleaded guilty to the criminal charge and Executive Officer Rob Barrow (Registrar of Long-term Insurance) Deputy Executive Officer: Insurance Mashudu Munyai (Deputy Registrar of Long-term Insurance) was fined R The entity mentioned in was referred to the prosecuting authorities for prosecution. Seven other entities which were found to have been conducting unregistered business were handed over for investigation and prosecution. The following table gives a breakdown of the cases that were referred for prosecution during 2005 and 2006: Activity Number of cases* In progress 5 7 Head: Insurance Prudential Suzette Vogelsang Head: Insurance Compliance Jacky Huma Head: Insurance Registration and Policy Patrick Ward Finalised 1 1 Reopened 0 2 Total 6 10 * May include cases relating to prior years. Long-term Insurance 11

14 REGISTRAR OF LONG-TERM INSURANCE 5.3 On-site visits The Insurance division continues to conduct on-site visits. The visits focus on the various risk areas of insurers and include the following: Counterparty risk Market and balance sheet risk Insurance risk Operational risk Liquidity risk Strategic risk Group and contagion risk Legal and regulatory risk. The majority of insurers reported the following top five risks (not ranked) in their annual statutory returns: Reputational risk Operational risk Regulatory risk Investment risk Expense risk. 5.4 Consumer complaints This office received 308 complaints (2005: 286) during the period under review and 99% of these were resolved. Consumer complaints can be broadly categorised as follows: Consumer complaints Low maturity/investment performance 35% 5.5 Inducements The Insurance division became aware of and had identified certain practices as inducements. This prompted the division to conduct an industry-wide investigation to determine the prevalence of such practices. The division will analyse the results and decide on the way forward. One specific practice involves a long-term policy. The FSB held discussions with the company and made it clear that aspects of the benefits constitute an inducement. The company did not share the FSB s view and it was agreed that the company could seek a declaratory order from the courts. At the time of writing the report the outcome was not known. 5.6 Involvement in international developments Southern African Development Community The Committee of Insurance, Securities and Non-banking Financial Authorities (CISNA), was established in June It consists of the regulatory authorities of capital markets, retirement funds, collective investment schemes, insurance companies and providers of intermediary services from the Southern African Development Community (SADC) countries. The secretariat for CISNA is located at the FSB. The main objectives of CISNA can be summarised as addressing the three principal challenges namely: market development, market harmonisation and systemic stability in the SADC region. During the year under review CISNA met at Victoria Falls in Zimbabwe on 27 and 28 April 2006 and in Ezulwini, Swaziland on 26 and 27 October Other/poor service 10% Claims disputes 20% Alleged Act/Policyholder Protection Rules contraventions 8% Misrepresentation/ Misselling 20% Premium refunds/other premium complaints 7% The Zimbabwe meeting focused on the projects identified during the special CISNA meeting held in South Africa in August 2004, updates on the activities of the Committee of SADC Stock Exchanges, FIRST Initiative s SADC training programme and understanding the operation of hedge funds and the regulation thereof. The Swaziland meeting focused on the progress made with the Finance and Investment Protocol and the harmonisation of the regulatory frameworks of CISNA. 12 Long-term Insurance

15 REGISTRAR OF LONG-TERM INSURANCE The SADC Finance and Investment Protocol was approved and signed by member states at the summit in Maseru, Lesotho on 17 August The FSB hosted the programme and the IAIS funded the training. Twenty-seven delegates from fifteen African countries attended the training seminar Memoranda of Understanding The FSB is party to a number of bilateral Memoranda of Understanding (MOU s) with international supervisors. A list of these supervisory authorities is available on the FSB website Membership of international associations The FSB is a member of the International Association of Insurance Supervisors (IAIS), the African Insurance Organisation (AIO) and of the Association of African Insurance Supervisory Authorities (AAISA). FSB staff members serve on the executive committees of IAIS and AAISA respectively and also act as secretary-general and treasurer of AAISA. The FSB attended the general assembly and executive committee meetings of the AAISA that were held in Cape Town, South Africa in May The objectives of the AAISA is to promote cross-border co-operation and sharing of information, assisting in the establishing, monitoring and developing of African insurance supervisory authorities, enhancing of standards of supervision on the African continent and discussion of issues of mutual concern. Membership of these international associations provides opportunities to participate in the formulation of principles, implementation of standards and focusing attention on the special needs of emerging market countries. Through its membership of the IAIS, the FSB is also committed to the sharing and transfer of knowledge to other emerging market jurisdictions in Africa. The IAIS Annual Conference took place in Beijing, China from 18 to 21 October The Deputy Executive Officer in his capacity as member of the Executive Committee of the IAIS, also attends the subcommittee meetings that are held three times a year Liaison with foreign supervisors The FSB is in regular contact with international supervisors, responds to numerous queries from abroad and liaises with Interpol in the policing of global financial fraud and crime. 6. Conclusion I, the Registrar, wish to record my appreciation for the cooperation this Office received from insurers and representative bodies of insurers, intermediary associations and consumer forums, as well as the auditing and actuarial professions. The close working relationship with the National Treasury is much appreciated. r j g barrow Registrar of Long-term Insurance 16 November 2007 The FSB s staff members are continuously involved in the ongoing work of the IAIS, including the hosting of an annual training seminar for African Insurance Supervisors. A training session on capital adequacy and risk assessment was hosted from 27 to 30 November Long-term Insurance 13

16 TABLE 1 - REGISTERED LONG-TERM INSURERS NAMES AND ADDRESSES* AS AT 31 DECEMBER 2006 Primary insurers POSTAL ADDRESS 1 1 Life Direct Insurance Limited P O Box Johannesburg Absa Life Limited P O Box 421 Johannesburg African Harvest Life Assurance Company Limited P O Box Waterfront African Life Assurance Company Limited P O Box 1941 Houghton AIG Life South Africa Limited P O Box Braamfontein Alexander Forbes Life Limited P O Box Sandton Algoa Insurance Company Limited P O Box Moffat Place Allan Gray Life Limited P O Box V&A Waterfront Alternative Channel Life Limited P O Box 1273 Parklands Anglo Dutch Life Limited Private Bag X50280 Waterfront Assupol Life P O Box Menlo Park AVBOB Mutual Assurance Society P O Box 1661 Pretoria Barinor Insurance Limited P O Box 3556 Tygervalley BOE Life Limited P O Box East End Capital Alliance Life Limited P O Box Johannesburg Centriq Life Insurance Company Limited P O Box Northlands Channel Life Limited P O Box 1273 Parklands Citadel Life Limited P O Box Claremont Clientele Life Assurance Company Limited P O Box 1316 Rivonia Constantia Life & Health Assurance Company Limited P O Box 1436 Cramerview Coronation Life Assurance Company Limited P O Box 993 Cape Town Corpcapital Life Insurance Limited P O Box Parklands Discovery Life Limited P O Box 3888 Rivonia E J Grobbelaar Insurance Company (Pty) Limited P O Box 4512 Pretoria Goodall and Bourne Assurance (Pty) Limited P O Box 2215 Cape Town Goodall and Company Funeral Assurance Society (Pty) Limited P O Box 2215 Cape Town Guardrisk Life Limited P O Box Sandton Hollard Life Assurance Company Limited P O Box Houghton HTG Life Limited P O Box 1781 Durbanville Investec Assurance Limited P O Box 4609 Cape Town Long-term Insurance

17 TABLE 1 - REGISTERED LONG-TERM INSURERS NAMES AND ADDRESSES* AS AT 31 DECEMBER 2006 Primary insurers POSTAL ADDRESS 31 Investec Employee Benefits Limited P O Box Sandton Investment Solutions Limited P O Box Sandton KGA Lewens Beperk P O Box 884 Bellville Liberty Active Limited P O Box 3329 Johannesburg Liberty Group Limited P O Box Johannesburg Lion of Africa Life Assurance Company Limited Private Bag X41 Mowbray M Cubed Life Limited P O Box Craighall McLife Assurance Company Limited P O Box 794 Durban Metropolitan Life International Limited P O Box 2212 Bellville Metropolitan Life Limited P O Box 2212 Bellville Metropolitan Odyssey Limited P O Box 4045 Tyger Valley Momentum Ability Limited P O Box 7400 Centurion Momentum Group Limited P O Box 7400 Centurion MS Life Assurance Company Limited P O Box Bryanston Nedgroup Life Assurance Company Limited P O Box East End Nestlife Assurance Corporation Limited P O Box 2919 Houghton Netcare Life Limited Private Bag X34 Benmore New Era Life Insurance Company Limited P O Box Braamfontein NIB Life Assurance Company Limited P O Box East End Old Mutual Alternative Risk Transfer Limited P O Box 455 Cape Town Old Mutual Life Assurance Company (South Africa) Limited P O Box 66 Cape Town Pinnafrica Life Limited P O Box Sloane Park Prescient Life Limited P O Box Tokai Professional Provident Society Insurance Company Limited P O Box 1089 Houghton Prosperity Insurance Company Limited P O Box Highveld Park Real People Assurance Company Limited P O Box Tecoma Regent Life Assurance Company Limited P O Box 4155 Edenvale Relyant Life Assurance Company Limited P O Box Greyville Rentmeester Assurance Limited P O Box Johannesburg RMA Life Assurance Company Limited P O Box Marshalltown 2107 Long-term Insurance 15

18 TABLE 1 - REGISTERED LONG-TERM INSURERS NAMES AND ADDRESSES* AS AT 31 DECEMBER 2006 Primary insurers POSTAL ADDRESS 61 RMB Structured Life Limited P O Box Benmore Saambou Life Assurers Limited P O Box Johannesburg SA Eagle Life Limited P O Box Marshalltown Safrican Insurance Company Limited P O Box 616 Johannesburg Sage Life Limited P O Box 7400 Centurion SAHL Life Assurance Company Limited P O Box 3918 Durban Sanlam Customised Insurance Limited P O Box 1 Sanlamhof Sanlam Life Insurance Limited P O Box 1 Sanlamhof Sekunjalo Life Assurance Limited Postnet Suite 96 Private Bag X3 Plumstead Sentry Assurance of South Africa Limited P O Box 1941 Houghton Standard General Insurance Company Limited, The Private Bag X170 Halfway House Stanlib Multi-Manager Limited P O Box 202 Melrose Arch Superflex Limited P O Box Sandton Ten-50-Six Life Limited P O Box Mowbray Universal Assurance Company Limited P O Box 1941 Houghton 2041 Reinsurers 76 African Reinsurance Corporation (SA) Limited P O Box 3013 Houghton General Reinsurance Africa Limited P O Box 444 Cape Town Hannover Life Reassurance Africa Limited P O Box Johannesburg Munich Reinsurance Company of Africa Limited P O Box 6636 Johannesburg RGA Reinsurance Company of South Africa Limited 8th Floor Letterstedt House Fedsure on Main Cnr Compground & Main Roads Newlands Cape Town Saxum Reinsurance Limited P O Box 1634 Houghton Swiss Re Life and Health Africa Limited P O Box Parkview 2122 * The most recent addresses appear in the table. 16 Long-term Insurance

19 TABLE 2 - TRANSFERS OF LONG-TERM BUSINESS CONFIRMED UP TO 31 DECEMBER 2006 TRANSFEROR TRANSFEREE EFFECTIVE DATE 1 AA Life Assurance Association Limited Amalgamated General Assurances Limited 2 ACA Insurers Limited Capital Alliance Life Limited 3 Adlams Funeral Benefit Society (Pty) Limited Homes Trust Life Assurance Company Limited 4 Affiliated Insurance Company Limited Standard General Insurance Company Limited 5 African Eagle Life Assurance Society Limited Guarantee Life Assurance Company Limited 6 African Funeral Furnishers (Pty) Limited Homes Trust Life Assurance Company Limited 7 Alexander Brothers (WM and WFJ Alexander, trading as) Homes Trust Life Assurance Company Limited 8 Alexander Brothers Funeral Fund (Pty) Limited Homes Trust Life Assurance Company Limited 9 Alliance Assurance Company Limited Protea Assurance Company Limited 10 Allianz Life Limited Momentum Lewensversekeraars Beperk 11 Allied Insurance Company Limited Absa Life Limited 12 APO Burial Society (Pty) Limited (TWJ and FC Roberts, trading as) African Peoples Organization Burial Society (Pty) Limited 13 Auto Protection Insurance Company Limited Homes Trust Life Assurance Company Limited 14 Avon Insurance Company Limited South African Mutual Life Assurance Society 15 Barinor Insurance Limited Bollard Investment Holdings Limited 16 Berrange Begrafnisfonds (Edms) Beperk Homes Trust Life Assurance Company Limited 17 Bodley s Funeral Fund (Pty) Limited Funeral Assurances Group Limited 18 Bolt & Seuns, EE (RH Bolt, trading as) E J Grobbelaar Versekeringsmaatskappy (Edms) Beperk 19 Bourne Brothers Insurers (Pty) Limited Rogers Insurance Company (Pty) Limited 20 Brummer & Seun, JPS (WH Brummer, trading as) Brummers Funeral Insurance Company (Pty) Limited 21 Cape of Good Hope Assurance Limited Rogers Insurance Company (Pty) Limited 22 Capital Assurance Company Limited South African Mutual Life Assurance Society 23 Colonial Mutual Life Assurance Society South African Mutual Life Assurance Society 24 Commercial Union Assurance Company Limited Commercial Union Assurance Company of SA Limited 25 Commercial Union Assurance Company of SA Limited Commercial Union Life Assurance Company of SA Limited 26 Commercial Union Life Assurance Company of SA Limited Metropolitan Life Limited 27 Cook, David T Home Trust Life Assurance Company Limited 28 Crusader Insurance Company Limited Security Life Assurance Corporation Limited 29 Crusader Life Assurance Corporation Limited (under judicial management) Hollard Life Assurance Company Limited Long-term Insurance 17

20 TABLE 2 - TRANSFERS OF LONG-TERM BUSINESS CONFIRMED UP TO 31 DECEMBER 2006 TRANSFEROR TRANSFEREE EFFECTIVE DATE 30 Crusader Life Assurance Corporation Limited (under judicial management) Southern Life Association Limited 31 Dove Insurance Corporation Limited Metropolitan Homes Trust Life Limited 32 Dove Insurance Corporation Limited (Funeral business) Homes Trust Life Assurance Company Limited 33 Dove, J. W. Homes Trust Life Assurance Company Limited 34 Dove s SA Funeral Fund (Pty) Limited Homes Trust Life Assurance Company Limited 35 Eagle Star Insurance Company Limited African Eagle Life Assurance Society Limited 36 Eastern District Burial Society (NFH Horace, trading as) Homes Trust Life Assurance Company Limited 37 E J Grobbelaar Versekeringsmaatskappy (Edms) Beperk Rentmeester Assurance Limited 38 Equity Life Assurance Company Limited Ned-Equity Insurance Company Limited 39 Erasmus, N. J. Homes Trust Life Assurance Company Limited 40 Fedsure Life Assurance Limited (All credit life business) Hollard Life Assurance Company Limited 41 Firstrand Limited Firstrand Insurance Limited 42 Funeral Fund (Pty) Limited Homes Trust Life Assurance Company Limited 43 Global Insurance Company Limited Capital Alliance Life Limited 44 Goodall & Williams Limited Homes Trust Life Assurance Company Limited 45 Goodwill Burial Society (PR Mosaka, trading as) Homes Trust Life Assurance Company Limited 46 Guarantee Life Assurance Company Limited African Eagle Life Assurance Society Limited 47 Guardian National Insurance Company Limited Charter Life Insurance Company Limited 48 Homes Trust Life Assurance Company Limited Metropolitan Homes Trust Life Limited 49 Hoogendoorn Limited, J. S. Funeral Assurances Group Limited 50 Hottentots-Holland Begrafnismaatskappy (Edms) Beperk Homes Trust Life Assurance Company Limited 51 Human & Pitt Funeral Limited Funeral Assurances Group Limited 52 Human and Sons (Pty) Limited, J. A. Funeral Assurances Group Limited 53 International Funeral Insurance Company Homes Trust Life Assurance Company Limited 54 Investec Employee Benefits Limited Liberty Group Limited 01/01/ Johannesburg Begrafnis Versekeringsmaatskappy (Edms) Beperk Homes Trust Life Assurance Company Limited 56 Jones Funeral Fund, JG (WF Miles and EAG Jones, trading as) Funeral Assurances Group Limited 57 Jones Funeral Fund (Pty) Limited Funeral Assurances Group Limited 58 Jones & Rice (Pty) Limited Homes Trust Life Assurance Company Limited 18 Long-term Insurance

21 TABLE 2 - TRANSFERS OF LONG-TERM BUSINESS CONFIRMED UP TO 31 DECEMBER 2006 TRANSFEROR TRANSFEREE EFFECTIVE DATE 59 Jones & Rice Funeral Insurers (Pty) Limited Homes Trust Life Assurance Company Limited 60 Law Union and Rock Insurance Company Limited Royal Insurance Company Limited 61 Legal & General Assurance Society Limited Legal & General Assurance of SA Limited 62 Lewensversekeringsmaatskappy van de Nederlanden van 1845 NV Netherlands Insurance Company of SA Limited 63 Lifegro Assurance Limited Momentum Lewensversekeraars Beperk 64 London and Scottish Assurance Corporation Limited Commercial Union Assurance Company of SA Limited 65 London Assurance Protea Assurance Company Limited 66 London Guarantee and Accident Company Limited Phoenix of SA Assurance Company Limited 67 Manufacturers Life Insurance Company Liberty Life Association of Africa Limited 68 Mercantile & General Reinsurance Company Limited Mercantile & General Reinsurance Company of SA Limited 69 Metropolitan Life Namibia Limited (Registered in Namibia) Metropolitan Life Limited 70 Metropolitan Life Limited (Lesotho business) Metropolitan Lesotho Limited 01/01/ Metropolitan Odyssey Limited Metropolitan Life Limited 01/01/ Momentum Assuransie Korporasie Beperk Momentum Lewensversekeraars Beperk 73 Natal Burial Society (Pty) Limited Homes Trust Life Assurance Company Limited 74 National Farmers Union Mutual Insurance Company Limited South African Mutual Life Assurance Society 75 National Funeral Assurance (Pty) Limited Homes Trust Life Assurance Company Limited 76 National Mutual Life Association of Australasia Limited Sage Life Limited 77 National Union Life Assurance (Pty) Limited Homes Trust Life Assurance Company Limited 78 NBS Insurance Company (1993) Limited NBS Life Assurance Company Limited 79 Neaser s Funeral Fund (Pty) Limited Homes Trust Life Assurance Company Limited 80 New India Assurance Company Limited Universal Assurance Company Limited 81 New Zealand Insurance Company (SA) Limited AA Life Association Limited 82 North British and Mercantile Insurance Company Limited Commercial Union Assurance Company of SA Limited 83 Northern Assurance Company Limited Commercial Union Assurance Company of SA Limited 84 Norwich Life South Africa Limited Fedsure Life Assurance Limited 85 Norwich Union Life Insurance Society Norwich Life SA Limited 86 Omega Versekeraars Beperk Onderlinge Versekeringsgenootskap AVBOB 87 Paarl Funeral Fund (Pty) Limited Funeral Assurances Group Limited 88 Pearl Assurance Company Limited Union National South British Insurance Company Limited Long-term Insurance 19

22 TABLE 2 - TRANSFERS OF LONG-TERM BUSINESS CONFIRMED UP TO 31 DECEMBER 2006 TRANSFEROR TRANSFEREE EFFECTIVE DATE 89 Peter Robertson & Company (P Robertson and GW Minnaar, trading as) Homes Trust Life Assurance Company Limited 90 Pietermaritzburg and District Burial Society Limited Homes Trust Life Assurance Company Limited 91 Pitt (Pty) Limited, L Funeral Assurances Group Limited 92 Pretorium Trust (Koöperatief) Beperk Rentmeester Versekeraars Beperk 93 Prosperity Insurance Company Limited New Era Life Insurance Company Limited 94 Protea Assurance Company Limited Protea Life Company Limited 95 Prudential Assurance Company Limited Prudential Assurance Company of SA Limited 96 Prudential Assurance Company of SA Limited Liberty Life Assurance of Africa Limited 97 Prudential Funeral Company (Pty) Limited Homes Trust Life Assurance Company Limited 98 Rand Life Assurance Company Limited Momentum Lewensversekeraars Beperk 99 Robert Brothers (JJ and FC Robertson, trading as) African Peoples Organization Burial Society (Pty) Limited 100 Rogers Funeral Fund Rogers Insurance Company (Pty) Limited 101 Rogers Funeral Fund (Pty) Limited, Geo H Funeral Assurances Group Limited 102 Rogers GH Funeral Assurances Group Limited 103 Rogers & Sons, WH (PJ and HH Rogers, trading as) Rogers Insurance Company (Pty) Limited 104 Royal Exchange Assurance Liberty Life Association of Africa Limited 105 Royal Insurance Company Limited South African Mutual Life Assurance Society 106 Sanlam Life Insurance Limited (Namibian business) Sanlam Namibia Limited 107 Sanlam Life Insurance Limited (Linked investment service business) Sanlam Personal Portfolios (Pty) Limited 108 Senator Versekeringsmaatskappy Beperk Rentmeester Versekeraars Beperk 109 South African Eagle Insurance Company Limited African Eagle Life Assurance Society Limited 110 South African Fire and Accident Insurance Company Limited African Eagle Life Assurance Society Limited 111 South African Mutual Fire and General Insurance Company Limited South African Mutual Life Assurance Society 112 South African Railways and Harbours Friendly Society Rogers Insurance Company (Pty) Limited 113 South African Trade Union Assurance Society Limited, The Amalgamated General Assurances Limited 114 Southern Cross Assurance Company Limited South African Metropolitan Life Assurance Company Limited 115 Southern Life Association, The Anglo American Life Assurance Company Limited 116 Standard General Insurance Limited, The Capital Alliance Life Limited 117 Standard Life Assurance Company Suid-Afrikaanse Nasionale Lewensassuransiemaatskappy 20 Long-term Insurance

23 TABLE 2 - TRANSFERS OF LONG-TERM BUSINESS CONFIRMED UP TO 31 DECEMBER 2006 TRANSFEROR TRANSFEREE EFFECTIVE DATE 118 STBS Insurance Company Limited UBS Insurance Company Limited 119 Suid-Afrikaanse Federasie van Begrafnisversekeringsverenigings Beperk Metropolitan Homes Trust Life Limited 120 Suid-Afrikaanse Verbandversekeringsmaatskappy Beperk Land-en Landboubank van Suid-Afrika 121 Sun Life Assurance Company of Canada Liberty Life Association of Africa Limited 122 Superflex Limited Investment Solutions Limited 123 Swift Funeral Assurance Society (Pty) Limited, John Homes Trust Life Assurance Company Limited 124 Swift Limited, John Homes Trust Life Assurance Company Limited 125 Swiss Re Life and Health Southern Africa Limited (Short-term business) Swiss Re Southern Africa Limited 126 Swiss Re Southern Africa Limited (Long-term business) Swiss Re Life and Health Southern Africa Limited 127 UBS Insurance Company Limited Absa Life Limited 128 Unie Versekeraars Beperk Onderlinge Versekeringsgenootskap AVBOB 129 Union Guarantee and Insurance Company Limited South African Metropolitan Life Assurance Company Limited 130 Uni-Protection Company Limited Permanent Life Assurance Company Limited 131 United Provident and Assurance Association of South Africa Limited Provident Assurance Corporation of Africa Limited, The Liquidator (Mr AH Gunn) 132 Universal Burial Company (Pty) Limited Permanent Life Assurance Company Limited 133 Universal Insurance Company Limited Capital Assurance Company Limited 134 Wasserfall & Hardick Funeral Fund and Assurance Society Limited Funeral Assurances Group Limited 135 Waterberg Begrafnisgenootskap (DJ Coetzee, trading as) Suid-Afrikaanse Federasie van Begrafnisversekeringsverenigings Beperk 136 Western Assurances Limited Onderlinge Versekeringsgenootskap AVBOB 137 Wilson Davey (Pty) Limited Homes Trust Life Assurance Company Limited 138 Yorkshire-General Life Assurance Company Limited Momentum Lewensversekeraars Beperk 139 Yorkshire Insurance Company Limited Yorkshire-General Life Assurance Company Limited Long-term Insurance 21

24 TABLE 3 - POLICIES FOR WHICH LONG-TERM INSURERS WERE REGISTERED AS AT 31 DECEMBER 2006 SECTION 4(7) RECLASSIFIED*** SINKING FUND LIFE HEALTH FUND DISABILITY ASSISTANCE AMOUNT ASSISTANCE Primary insurers 1** 1 Life Direct Insurance Limited X X X X 2 Absa Life Limited X X X X X X X 3 African Harvest Life Assurance Company Limited X X X 4 African Life Assurance Company Limited X X X X X X X 5 AIG Life South Africa Limited X X X X X X 6 Alexander Forbes Life Limited X X X X X 7 Algoa Insurance Company Limited X X X X 8 Allan Gray Life Limited X X X 9 Alternative Channel Life Limited X X X 10* Anglo Dutch Life Limited X X 11 Assupol Life X X 12 AVBOB Mutual Assurance Society X X X 13* Barinor Insurance Limited X X 14 BOE Life Limited X X X 15 Capital Alliance Life Limited X X X X X 16 Centriq Life Insurance Company Limited X X X X X X X 17 Channel Life Limited X X X X X X X 18 Citadel Life Limited X X X 19 Clientele Life Assurance Company Limited X X X X X X X 20 Constantia Life & Health Assurance Company Limited X X X X 21 Coronation Life Assurance Company Limited X X X 22* Corpcapital Life Insurance Limited X X X 23 Discovery Life Limited X X X X X X 24* E J Grobbelaar Versekeringsmaatskappy (Edms) Beperk X Goodall and Bourne Assurance (Pty) Limited X * Goodall and Company Funeral Assurance Society (Pty) Limited X Guardrisk Life Limited X X X X X X 28 Hollard Life Assurance Company Limited X X X X X X X 29 HTG Life Limited X X X 22 Long-term Insurance

25 TABLE 3 - POLICIES FOR WHICH LONG-TERM INSURERS WERE REGISTERED AS AT 31 DECEMBER 2006 SECTION 4(7) RECLASSIFIED*** SINKING FUND LIFE HEALTH FUND DISABILITY ASSISTANCE AMOUNT ASSISTANCE Primary insurers 30 Investec Assurance Limited X X X 31 Investec Employee Benefits Limited X X X X X X X 32 Investment Solutions Limited X X X X X 33 KGA Lewens Beperk X Liberty Active Limited X X X X X X X 35 Liberty Group Limited X X X X X X**** 36 Lion of Africa Life Assurance Company Limited X X X X X 37 M Cubed Life Limited X X X 38 McLife Assurance Company Limited X X X X X 39 Metropolitan Life International Limited X X 40 Metropolitan Life Limited X X X X X X X 41 Metropolitan Odyssey Limited X X 42 Momentum Ability Limited X X X X X X 43 Momentum Group Limited X X X X X X X 44 MS Life Assurance Company Limited X X X X X X X 45 Nedgroup Life Assurance Company Limited X X X X X 46 Nestlife Assurance Corporation Limited X X X X X 47 Netcare Life Limited X X X X 48 New Era Life Insurance Company Limited X X X X 49 NIB Life Assurance Company Limited X X X 50 Old Mutual Alternative Risk Transfer Limited X X X X X X X 51 Old Mutual Life Assurance Company (South Africa) Limited X X X X X X X**** 52 Pinnafrica Life Limited X X X X 53** Prescient Life Limited X X X 54 Professional Provident Society Insurance Company Limited X X X 55 Prosperity Insurance Company Limited X X X X 56 Real People Assurance Company Limited X X X X X 57 Regent Life Assurance Company Limited X X X X X X X 58 Relyant Life Assurance Company Limited X X X X X 59 Rentmeester Assurance Limited X X X X X Long-term Insurance 23