In terms of the COIDA Licence and pursuant to RMA’s registration as a short-term insurer in terms of the Short-term Insurance Act, 53 of 1998 (“the Short-term Insurance Act“), RMA is authorised to underwrite the cover and benefits for employers against their liabilities to employees injured in the course and scope of their employment, as prescribed in COIDA.
In terms of the amendments to the COIDA Licence of RMA, all Class XIII employers, being employers forming part of the Iron, Steel, Artificial Limbs, Galvanising, Garages, Metals and related industries, would compulsorily be transferred from the Compensation Fund to RMA with effect from 1 March 2015. RMA therefore currently underwrites all Class IV employers, being employers forming part of the Mining, Quarrying, Sand Pits industries and all Class XIII employers, against the liabilities of its employees injured in the course and scope of employment.
Various changes to the RMA group of companies were consequently proposed to cater for this change to the business of RMA, some of which have already been implemented.
As a final step in the reorganisation of the RMA group of companies, RMA has to transfer all its business which does not amount to insurance business as prescribed in COIDA (the “Non-COIDA Business“) to entities forming part of the RMA group of companies. The Non- COIDA Business includes all policies underwritten by RMA which provide cover in excess of the cover and benefits prescribed in terms of COIDA (“the Non-COIDA Policies“).
The Non-COIDA Policies are voluntary short-term insurance policies offered to the policyholders of COIDA Policies and provides cover and benefits in excess of the cover and benefits prescribed in terms of COIDA.
Augmentation Policies, Riot and Strike Personal Injury Policies, Commuting Journey Policies and Death Policies.
The policyholders in terms of the Non-COIDA Policies are the mining employers who applied for cover and benefits in respect of their employees in accordance with the provisions of the Non-COIDA Policies (“the Non-COIDA Policyholders“).
RMA Life will therefore become the new insurer of the Non-COIDA Policies and will issue new replacement policies to the Non-COIDA Policyholders.
It should be noted that RMA Life is a registered long-term insurer and RMA is a registered short-term insurer. This means that the replacement policies will be long-term insurance policies, with different terms and conditions than the current short-term insurance policies. The replacement policies are available on the website of RMA at www.randmutual.co.za.
A substitution can occur without the replacement of the original policy; alternatively a replacement policy can be issued by the substituting insurer.
In terms of the Short-term Insurance Act, a substitution of insurers may only occur with the approval of the Registrar of Short-term Insurance to ensure that the policyholders’ rights and interests are at all times protected. It is for this reason that the statutory actuaries of the relevant insurers (if one is appointed) give a report on the effect of the transaction on the policyholder security and reasonable benefit expectations. Such reports are made available to all Non-COIDA Policyholders as part of the regulatory process.
It is for this reason that a detailed regulatory process is prescribed that is compliant with the provisions of the Short-term Insurance Act and the requirements of the Registrar of Short- term Insurance.
One of these requirements is that the Substitution Transaction must be approved by the Registrar of Short-term Insurance. The Registrar of Short-term Insurance will therefore carefully consider the Substitution Transaction and will ensure that your interests are at all times protected.
RMA Life forms part of the RMA group of companies and is a subsidiary of RMA.
Carefully peruse the terms and conditions of the new replacement policy.
It should however be noted that current benefits will continue to be paid in the same manner as before the Substitution Transaction and the premiums will remain unchanged.
- RMA and RMA Life gave notice of their intention to conclude the Substitution Transaction to the Registrar of Short-term Insurance.
- The statutory actuary of RMA Life compiled a report to the Registrar of Short- term Insurance to indicate the impact (if any) on the Non-COIDA Policyholders if the Substitution Transaction is approved. RMA does not have a statutory actuary as this is not required for short-term insurers.
- The Registrar of Short-term Insurance has given its preliminary support of the Substitution Transaction and allowed RMA and RMA Life to make details of the Substitution Transaction known to the Non-COIDA Policyholders and other interested parties.
- Notice of the Substitution Transaction has been published in various newspapers and other forms of communication to ensure that all policyholders, shareholders and other stakeholders receive adequate notice of the Substitution Transaction.
RMA and RMA Life intend to apply to the Registrar of Short-term Insurance for approval of the transaction on 15 December 2015.
Any owner of a policy, shareholder, creditor or other interested party affected by the Substitution Transaction, shall be entitled to file an affidavit or other documents to the Registrar of Short-term Insurance on any matter in connection with the Substitution Transaction, which representations must reach the Registrar of Short-term Insurance by no later than 30 November 2015. If you do not have an objection to the Substitution Transaction, you do not have to file affidavits or make representations.
Please note that the Short-term Insurance Ombudsman or the Ombud for Financial Services Providers will not be able to assist you in this matter.
- the agreement concluded between RMA and RMA Life in respect of the Substitution Transaction;
- copies of the replacement policies; and
- any other documents required by the Registrar of Short-term Insurance.
The above information will also be available during the above period (from 13 November 2015 to 30 November 2015) on the website of RMA at www.randmutual.co.za.
Within this 15 day period, any person who has an interest in this matter may submit to the Registrar of Short-term Insurance such representation concerning the Substitution Transaction as are relevant to his/her/its interests, which submission must reach the Registrar of Short-term Insurance no later than 30 November 2015.