The Insurance Institute of Gauteng (IIG), through its Education Portfolio, continued its Wednesday Wisdom webinar series on 2 September, partnering with Hollard for an insightful session focused on one of the most significant regulatory developments facing South Africa’s financial services industry: the Conduct of Financial Institutions (COFI) Bill.
The session was presented by Danny Joffe, Head of Hollard Group Legal, who unpacked the journey of the Bill, what it could mean for the insurance industry and, importantly, what financial institutions can begin doing now to prepare.
COFI has been a long time in the making. The first draft was released in December 2018, followed by a second draft in 2020. Since then, the industry has continued to evolve within an increasingly conduct-focused regulatory environment.
A central theme throughout the session was that COFI represents far more than the introduction of another piece of legislation. It signals a fundamental shift in the philosophy of financial-sector regulation, moving away from a fragmented collection of conduct requirements towards a more consolidated, principles- and outcomes-based framework.
But what does it all actually mean?
For many years, insurers and financial service providers have operated within detailed rules prescribing what must be done, how disclosures should be made and which processes should be followed. Under an outcomes-focused approach, however, compliance cannot simply be demonstrated by ticking a series of boxes.
Instead, the question increasingly becomes: What was the outcome for the customer?
Was the customer treated fairly? Was the product appropriate for their needs? Was the advice suitable? Were they provided with sufficient information? And, ultimately, did the institution’s actions result in a fair customer outcome?
The discussion reinforced that this shift places culture and governance firmly at the centre of conduct regulation. Treating Customers Fairly cannot simply exist within policies, frameworks or compliance functions; it needs to become part of how organisations make decisions and conduct business every day.
The implications extend across the entire customer journey, from product design, marketing, advice and distribution to servicing, claims and complaints.
Product governance was another important area explored during the session. Financial institutions will increasingly need to understand whether products are designed for the right target market, provide genuine value and protection, and continue to perform as intended once they are in the hands of customers.
Intermediary and third-party oversight also become increasingly important. While certain activities may be outsourced, the associated conduct risk cannot simply be forgotten.
So, with the final detail of COFI still to emerge, what should organisations be doing now?
Perhaps the strongest takeaway from the session was: Do. Not. Wait.
Financial institutions can already begin assessing their readiness across governance and culture, product governance, sales and distribution, outsourcing and third parties, data and reporting, claims and complaints, transformation and inclusion, and licensing and authorisation.
Importantly, the industry is not starting from scratch. The Policyholder Protection Rules, Treating Customers Fairly principles and existing governance and conduct requirements have already introduced many of the disciplines associated with outcomes-focused regulation.
The challenge now is to understand what exists, identify the gaps and begin connecting those pieces into a coherent approach to conduct.
The IIG extends its sincere appreciation to Danny Joffe and Hollard for sharing their expertise and insights on the evolving COFI landscape, and to all attendees and industry stakeholders who continue to participate, engage and contribute to these important conversations.
As the regulatory environment continues to evolve, conversations such as these remain essential in helping insurance professionals understand the changes around us and build the knowledge and readiness required to navigate what comes next.
Ambassador Education – Insurance Institute of Gauteng
Strategic Change Manager – Absa Insurance
