The Impact of the Twin Peaks Model on The Insurance Industry




Insurance, financial services providers, financial sector regulation, Financial Sector Regulation Bill, market conduct, prudential regulation, Twin Peaks, FAIS Ombud, Enforcement Committee, Treating Customers Fairly


Financial regulation in South Africa changes constantly. In the quest to find the ideal regulatory framework for optimal consumer protection, rules change all the time and international trends have an important influence on lawmakers nationally. The Financial Sector Regulation Bill, also known as the "Twin Peaks" Bill, is the latest invention from the table of the legislature, and some expect this Bill to have far-reaching consequences for the financial services industry. The question is, of course, whether the current dispensation will change so quickly and so dramatically that it will literally be the end of the world as we know it or whether there will be a gradual shift in emphasis away from the so-called silo regulatory approach to an approach that distinguishes between prudential regulation on the one hand and market conduct regulation on the other. A further question is whether insurance as a financial service will change dramatically in the light of the expected twin peak dispensation. The purpose of this paper is to discuss the implications of the FSR Bill for the insurance industry. Instead of analysing the Bill feature for feature, the method that will be used in this enquiry is to identify trends and issues from 2014 and to discuss whether the Twin Peaks model, once implemented, can successfully eradicate similar problems in future. The impact of Twin Peaks will of course have to be tested, but at this point in time it may be very useful to take an educated guess by using recent cases as examples. Recent cases before the courts, the Enforcement Committee and the FAIS Ombud will be discussed not only as examples of the most prevalent issues of the past year or so, but also as examples of how consumer issues and systemic risks are currently being dealt with and how this may change with the implementation of the FSR Bill.




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Author Biography

Daleen Millard, Professor of Private law, University of Johannesburg

Department of Private law, professor of Private law




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Andrew Graham Stunden and Nicolaas Leon van der Walt t/a Investment & Insurance Brokers case number FAIS 01993/11-12/WC 3

Auberge Guest Lodge CC v Suzette Brickhill and Mathys Johannes Marais t/a Protea Makelaars case number FAIS 05228/11-12/MP 3

Fliptrans CC v S & P Insurance Advisors (Pty) Ltd t/a McCrystal and Partners and E Solmes case number FAIS 07987/11-12/GP3

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Sharemax Investments (Pty) Ltd (In Business Rescue) v Siegrist case number FAIS 00039/11-12/GP1 and FAIS 06661/10-11/WC1 of 13 April 2015

Susanna Aletta Grobler v Direct Axis (Pty) Ltd case number FOC 1434/05 NP 2

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How to Cite

Millard, D. (2017). The Impact of the Twin Peaks Model on The Insurance Industry. Potchefstroom Electronic Law Journal, 19, 1–37.




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