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The SRA sets out a structured approach to identifying, assessing and managing money laundering, terrorism financing and proliferation financing (ML/TF/PF) risks in the sector over the three-year period from January 2022 to December 2024. It considers the types of threats and vulnerabilities as well as the mitigating controls in place to determine the level of residual risk.
As the supervisor for life insurers, the PA is responsible for ensuring compliance with the requirements of the Financial Intelligence Centre Act 38 of 2001 (FIC Act) to combat ML/TF/PF.
The assessment is calibrated to South Africa’s most recent national risk outputs, including the 2022 National Risk Assessment and subsequent TF/PF work, as well as to the Financial Action Task Force (FATF) Recommendation 1 to identify, assess, understand and mitigate ML/TF/PF risks.
Key findings
Inherent risks: The main financial crime threats to the life insurance sector are fraud, corruption and bribery, tax evasion and drug trafficking. The inherent risks are rated as follows:
Mitigating controls: Measures introduced by life insurers – together with supervisory actions implemented by the PA, including market-entry controls, targeted inspections, remediation and administrative sanctions, and awareness initiatives – have contributed to reducing risk. The strength of the mitigating controls within the life insurance sector is rated as follows:
Residual risk: The overall residual risk for the sector is assessed as follows:
Ongoing risk assessment and continuous efforts to strengthen risk management are essential for maintaining the integrity of the life insurance sector.
