The FSB’s Reinsurance Regulatory Review Position Paper in September 2016 sketches a reinsurance regime by which foreign reinsurers wishing to reinsure South African risks will have to register as a licensed branch in South Africa unless the foreign reinsurer is regulated by a country with an equivalent regulatory framework according to the FSB. Presumably the traditional jurisdictions will be approved, notably the UK and EU jurisdictions.
The EU and the US have recently concluded a bilateral agreement relating to reinsurance. The agreement includes reciprocal commitments to remove the need for collateral and for a local presence for reinsurers which operate in both markets. It includes an undertaking to comply with group supervision practices.
Is it too much to hope for that the FSB will negotiate similar reciprocity rights so that South African reinsurers can do reinsurance business in equivalent jurisdictions? We also need to look further than the traditional foreign jurisdictions and see what can be done in Africa and Asia.