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Alexander Forbes Group Holdings Limited

Fit and Proper Policy

Alexander Forbes Group Holdings Ltd Fit and Proper Policy

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TABLE OF CONTENTS

1. Document Information and history ................................................................................................... 3

1.1 Document draft history ............................................................................................................ 3

1.2 Document review history ......................................................................................................... 3

1.3 Change mechanism ................................................................................................................ 3

2 Overview .......................................................................................................................................... 3

2.1 Purpose ................................................................................................................................... 3

2.2 Scope ...................................................................................................................................... 4

2.3 Related Documents ................................................................................................................. 4

2.4 Legislative Framework ............................................................................................................ 4

2.5 Policy Governance .................................................................................................................. 5

2.6 Terminology and Definitions .................................................................................................... 6

3 Assessment of Fit and Proper ......................................................................................................... 6

3.1 Assessment Criteria ................................................................................................................ 6

3.2 Assessment process ............................................................................................................... 8

3.3 Ongoing Assessment .............................................................................................................. 8

3.4 Criteria for reassessment ........................................................................................................ 9

3.5 Consent for assessment ....................................................................................................... 10

4 Outsourcing .................................................................................................................................... 10

5 Reporting to the Registrar .............................................................................................................. 10

6 Policy Review ................................................................................................................................. 12

Appendix A: Detailed Fit and Proper Requirements ............................................................................. 12

Appendix B: Key Role Questionnaire .................................................................................................... 15

Appendix C: Regulatory Requirements ................................................................................................. 16

Appendix D – Known limitations and planned developments ............................................................... 18


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1. Document Information and history

Document owner

Author/Reviewer

Creation date

Latest approval date

Version

1.1 Document draft history

Date Version Status Reviewers Action/Comment

1.2 Document review history

Date Version Status Reviewers Action/Comment

1.3 Change mechanism

1.3.1 Any requirement for change or clarification should be addressed to the Document Owner, who will log the issue in the Issue Log.

1.3.2 These issues will usually be collected via the Issue Log, until the regular policy review date, at which point they will be addressed, as part of the policy review and update process.

1.3.3 Urgent issues will be addressed as soon as possible, and where necessary, passed via the normal governance process, for acceptance, before being communicated.

1.3.4 Any changes to this policy must adhere to the Change Policy.

2 Overview

2.1 Purpose

2.1.1 The purpose of this document is to set out the principles, and provide clear policy, with respect to the fit and proper requirements for Alexander Forbes Group Holdings Ltd and its subsidiaries (“the Company”)”).

2.1.2 The Company strives to apply the highest standards of ethics and integrity that promote sound corporate governance, during the conduct of its business activities, and fit and proper behaviour is expected of all its Responsible Persons and employees.


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2.2 Scope

2.2.1 The fit and proper requirements, defined in this policy, shall apply, in full, to all Responsible Persons across the Company.

2.2.2 The fit and proper requirements, defined in this policy, shall apply, in full, to any function or activity that the Company outsources that meets the definition of a Responsible Person, as defined by this policy. This encompasses all business units, subsidiaries, and other interests, irrespective of their legal structure or geographic location, where applicable.

2.2.3 The propriety considerations, defined in this policy, shall be applicable to all the employees of the Company, and proportionality, with regard to propriety, may be applied for persons who aren’t in Key Roles in the business. This must be assessed on a case-by-case basis.

2.2.4 Particularly with respect to directors; the fit and proper requirements must, at a minimum, meet the requirements set out by this Policy, which the Company adopts.

2.3 Related Documents

2.3.1 This policy will be applied in conjunction with the following policies:

Policy Name Relationship Enterprise Risk Management Policy Referenced Conflict of Interest Policy Referenced Outsourcing Policy Referenced Policy on Policies Referenced

2.4 Legislative Framework

2.4.1 This policy has been drafted in contemplation of compliance with the requirements under the Prudential Standards as per the Insurance Act proposed Solvency Assessment and Management (“SAM”) regime, as set out in the following documents:

2.4.1.1 Position Paper 71(v6) on System of Governance

2.4.1.2 Board Notice 158 of 2014 (“BN 158 of 2014”)

2.4.1.3 Board Notice 113 of 2015 (“BN 113”)

2.4.1.4 Board Notice 158 of 2015 (“BN 158 of 2015”) 2.4.1.5 Prudential Standard GOI4

2.4.2 Additionally, this policy takes into account the requirements of the following documents:

2.4.2.1 Companies Act 71 of 2008 (“CA”)

2.4.2.2 Long-term Insurance Act 52 of 1998 (“LTIA”)

2.4.2.3 Financial Advisory and Intermediary Services Act 37 of 2002 (“FAIS”)

2.4.2.4 Financial Intelligence Centre Act 38 of 2001 (“FICA”)

2.4.2.5 Collective Investment Schemes Control Act 45 of 2002 (“CISCA”)

2.4.2.6 Pension Funds Act 24 of 1956 (“PFA”)

2.4.2.7 King IV Report on Corporate Governance for South Africa 2016 (“King IV”) 2.4.2.8 Short Term Insurance Act 53 of 1998 (“STIA”) 2.4.2.9 Insurance Act 18 of 2017


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2.5 Policy Governance

2.5.1 The table below outlines the roles and responsibilities of the stakeholders responsible for the governance of this Policy.

Responsibility Structure Interest, Duties and Responsibilities

Ownership The Board of Directors of Alexander Forbes Group Holdings Limited (AFGH)

The Board is responsible for policy ownership.

Approval Board of Directors of AFGH

The Board is responsible for prior approval of this policy.

Review Board of Directors of AFGH

It is the responsibility of the Board and Senior Management, to review this policy, on at least an annual basis. Where appropriate, the policy must be adapted, in view of any significant changes with respect to fit and proper requirements, in the business.

Supervision Board of Directors of AFGH

The Board is ultimately responsible for the application and requirements of this Policy, but delegates some functions to Board committees, management committees, other forums, managers and any other persons.

Risk and Compliance Committee (“RISCO”)

The RISCO is responsible for ensuring that all committees, forums and individuals, who have responsibility under the Policy, fulfil their responsibilities in a timely and diligent manner.

Audit Committee The Audit Committee is responsible for the governance of internal audit’s assessment of compliance with this Policy. It is responsible for assigning and monitoring remediation of any non-compliance, or other findings, by internal audit.

Operational Implementation

Group Executive Committee of AFGH

The Group Executive Committee is responsible for operational implementation, but delegates to the various operational forums, or persons, to address or monitor operational matters.

Nominations Committee of AFGH

The Nominations Committee is responsible for referring, reviewing and undertaking assessments of persons to be appointed to serve on any of the Boards, Audit Committee and Risk Committee.

Managing Executive HR The Executive HR is responsible for the following: Ensuring that appropriate fit and proper

assessments are carried out for each Responsible Person including;


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Providing information, training and guidance to responsible managers and governance forums on matters concerning the procedures for fit and proper assessments;

Ensuring that information and documents collected for fit and proper assessments is protected from unauthorised access, misuse, modification or unauthorised disclosure

2.5.2 In the event of a breach of this Policy, routine communication must occur, with respect to escalation to the appropriate governance forum, in accordance with the Enterprise Risk Management Policy.

2.6 Terminology and Definitions

The following key terms used in the policy, are defined:

2.6.1 Key Roles: This shall include Board Members, Company Secretary, Senior Management, including Group Executive, Heads of Control Functions, Heads of Statutory Functions, including Statutory Actuary(ies), Public Officers, Significant Owners (as defined below), External Auditors Key Individuals and representatives, and other Key Roles.

2.6.2 Responsible Persons: This shall be persons in Key Roles, and can be natural or legal persons. Regulated Subsidiaries of the Company, and the respective Key Individuals and Representatives, shall also be considered Responsible Persons. Refer to Appendix C for more details on this.

2.6.3 Significant Owners: Shareholders deemed to exercise control, in terms of the Long-term Insurance Act.

2.6.4 Fit: To be deemed fit; at any time, a responsible person must have the following, to enable sound and prudent execution of accountabilities and responsibilities:

2.6.4.1 The necessary professional and/or formal education and qualifications; 2.6.4.2 Technical and business/managerial knowledge, skill and experience; 2.6.4.3 Required financial soundness/stability; and 2.6.4.4 Any other additional requirements, as may be deemed fit by the Board and/or

the Group Executive.

2.6.5 Proper: To be deemed proper; at any time, an individual must be of good repute and integrity.

3 Assessment of Fit and Proper

3.1 Assessment Criteria

3.1.1 In order to be deemed fit, an assessment of both managerial and technical competency must be considered. At a minimum, this must include an assessment of the following:

3.1.1.1 Professional, industry and formal qualifications; including compliance with any applicable legislation, regulations or standards, applicable to the person’s professional qualification or area of work;


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3.1.1.2 Knowledge and relevant experience within the insurance, investment, retirement benefits industries/sectors, other financial sectors, or other businesses;

3.1.1.3 Where relevant; the insurance, investment, financial, accounting, actuarial and management skills of the person; and

3.1.1.4 Whether the person has demonstrated due skill, care, diligence and compliance with the relevant legislation, regulations and standards of the area/sector that he/she has worked in.

3.1.2 The assessment of whether an individual can be deemed fit, must explicitly take into account the specific role and duties that would be allocated to the person, in the work place. This includes consideration of the knowledge, skills and resources necessitated by the size and nature of the business, and the role in the business.

3.1.3 When assessing the skills and suitability of a director, the assessment should be done in accordance with the terms of reference of the Nominations Committee, Companies Act requirements and must take the collective knowledge, competence and experience of the Board into consideration. In particular, with respect to:

3.1.3.1 Market knowledge;

3.1.3.2 Business strategy; particularly the Company’s or relevant subsidiary’s business strategy and business model;

3.1.3.3 The systems of governance, risk management and internal control, but with particular reference to the risks faced by the Company or relevant subsidiary. This must give due consideration to the specific business systems and infrastructure of the Company;

3.1.3.4 Financial and actuarial analysis; and

3.1.3.5 The Regulatory framework and requirements.

3.1.4 The assessment of propriety must, at least, consider the person’s reputation and integrity; encompassing an assessment of whether there are reasons to believe, from past conduct, that the person may not discharge their duties, in line with applicable rules, regulations and guidelines. At a minimum, this must consider:

3.1.4.1 Criminal, financial or Supervisory antecedents;

3.1.4.2 To the extent that it is known; the person’s past business conduct;

3.1.4.3 Financial stability; and

3.1.4.4 Professional antecedents.

3.1.5 Refer to Refer to Appendix C for specific reporting requirements under the various regulations.


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4.1.1 Appendix A and Appendix C for further guidance on the fit and proper assessment considerations.

4.1.2 For Significant Owners; the assessment shall consider their financial soundness, and the integrity in their personal behaviour, and their business conduct. At a minimum, the assessment must consider whether:

4.1.2.1 There are any indicators that they will not be able to meet their debts, as they fall due;

4.1.2.2 Relevant prudential solvency requirements for financial institutions are met;

4.1.2.3 They have been subject to any judgments;

4.1.2.4 They have been liquidated or sequestrated; and

4.1.2.5 They have been able to provide the supervisor with a satisfactory credit reference.

4.2 Assessment process

4.2.1 At a minimum, Responsible Persons shall be assessed according to the process defined in this policy.

4.2.2 A Key Role Questionnaire and a Fit and Proper Declaration. The Group Executive shall ensure that the Key Role Questionnaire reflects the minimum fit and proper requirements, defined by this policy. The Group Executive must satisfy itself that the Key Role Questionnaire will capture sufficient detail, to enable an objective assessment of whether or not a person is fit and proper to discharge the duties being assigned to them. The Group Executive shall review the Key Role Questionnaire and the Fit and Proper Declaration, on at least an annual basis.

4.2.3 All Responsible Persons shall be required to complete and sign, both the Key Role Questionnaire and a Fit and Proper Declaration. These shall be submitted to the Group Executive or Nominations Committee (where appointment falls within their mandate), for consideration and approval, prior to appointment of the individual. Individuals who do not meet the fit and proper criteria for Responsible Persons, as defined in this policy, shall not be appointed into that respective Key Role. For further detail on dealing with unsuccessful fit and proper assessments, with respect to existing Key Role appointments in the business, refer to section 4.4 below.

4.2.4 In this context, the above fit and proper appointment process shall extend to the internal recruitment and promotion process for Key Roles in the Company.

All documentation relating to the fit and proper assessments will be retained to demonstrate the fitness and propriety of Key Persons and their immediate predecessors.

4.3 Ongoing Assessment

4.3.1 Assessment shall not be limited to the time of employment. It must extend to arranging for further professional training, as necessary, so that Responsible Persons are able to meet the changing, or increasing requirements, of their assigned duties.


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4.3.2 At a minimum, the Group Executive shall ensure that Responsible Persons receive training, on at least an annual basis, and that the training programme includes an assessment that will allow the Group Executive to satisfy itself, as to the ongoing fitness and propriety of Responsible Persons in the business.

4.3.3 Prior to any changes that occur within the Board; the Company shall be able to demonstrate that the collective knowledge of the members of the Board will be maintained at an adequate level, so that the sound and prudent management of the undertaking will continue.

4.4 Criteria for reassessment

4.4.1 The Company shall take all prudent steps, to ensure that a person does not continue to hold a Key Role position, if they are no longer regarded as being fit and proper, there is an onus on each responsible person to proactively declare any negative responses to the ant questions should they fail to declare such disciplinary action may be taken.

4.4.2 The following criteria must result in a review of whether a Responsible Person should no longer be regarded as being fit and proper:

4.4.2.1 Events leading to doubt that the individual might discourage the Company from pursuing business, in a way that is consistent with the applicable legislation;

4.4.2.2 Events leading to doubt that the individual might enhance the risk of financial crime to the Company; such as money laundering or the financing of terrorism;

4.4.2.3 Events leading to a reason to believe that the sound and prudent management of the Company is at risk;

4.4.2.4 Upon the request of the Regulator; and

4.4.2.5 Upon the request of the Group Executive , resulting from failed approval of a fit and proper assessment, based on the Key Role Questionnaire and Fit and Proper Declaration.

4.4.3 In the above cases, a formal review process shall be carried out, and concluded, in line with the Company’s review and disciplinary process, as defined in the Company’s Human Resources policies and codes. The review process shall be carried out, with respect to the fit and proper criteria, defined in this policy.

4.4.4 Depending on the nature of the non-compliance with the fit and proper requirements, a

Responsible Person may be considered for another role. This will be considered, and

approved, by the Nominations Committee and/or the Group Executive , depending on the

seniority of the role, including the reasons for approval, as the case may be.


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4.5 Consent for assessment

4.5.1 In accordance with the Company’s Code of Conduct and this policy, Responsible Persons and employees consent to undergoing criminal, credit, qualification and employment history checks, performed by a reputable verification agency, before appointment is finalised, and that the checks may be repeated annually or more frequently (if so warranted), during the time of appointment. Reference checks may also be performed, if deemed necessary.

5 Outsourcing

5.1.1 The fit and proper requirements, and assessment, stated in this policy, shall extend to the persons working within the outsourced function, at the service provider, as well as to the person within the Company, who is responsible for the outsourced function.

5.1.2 The assessment of the fitness of the person, who is responsible for the outsourced function, within the Company, must take into account the role of that person. For example; the level of knowledge required by the person responsible, at the Company, for overseeing the role, would not necessarily need to be as deep as that of the person performing the role, at the service provider. However, the person responsible, at the Company shall, at a minimum, have to possess the knowledge and experience, regarding the outsourced function that they are able to question the performance and results of the function.

5.1.3 For further context, with respect to Outsourcing; refer to the Group Outsourcing Policy.

6 Reporting to the Registrar

6.1.1 The Compliance Function shall ensure that the Regulator is notified, as follows:

6.1.1.1 Notify the Regulator of the Key Roles in the business; including an analysis and the reasons for defining them as such, and the names of the persons fulfilling those positions;

6.1.1.2 When a new person is appointed into a Key Role;

6.1.1.3 When changes occur, with regard to Key Roles; and

6.1.1.4 When a Responsible Person is replaced, since the Company considers that person to no longer meet the fit and proper requirements.

6.1.1.5 When there is a change in circumstances that may adversely affect the fit and proper status as well as the actions taken against a person in a key role.

6.1.2 Notification shall be undertaken, in writing, and submitted to the Regulator, without undue delay.

6.1.3 The Compliance Function shall ensure that the Key Role Questionnaire, accompanied by Curriculum Vitae, is submitted to the Regulator, for each fit and proper assessment. Refer to Appendix B for further guidance on what this submission should include.

6.1.4 Notification to the Regulator must be made 30 days prior to appointment, with respect to a new Key Role being filled, must include the following:

6.1.4.1 The identity of the person, and the function that he/she will perform;


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6.1.4.2 Information, to enable the Regulator to assess the person’s fitness and propriety;

6.1.4.3 The rationale for appointing the person; and

6.1.4.4 If applicable; the identity of the person that has been replaced, because he/she is no longer considered to meet the fit and proper requirements, and the rationale behind the decision.

6.1.5 If a Key Role is outsourced, the Company shall notify the Regulator of the person responsible for the Key Role.

6.1.6 If the Significant Owner that is to be assessed, is a legal person or a corporate entity; sufficient and appropriate information, to assess if it meets the fit and proper requirements, will need to be submitted to the Regulator, which may include:

6.1.6.1 The nature and scope of its business;

6.1.6.2 Its Significant Owners, where necessary;

6.1.6.3 Its source of financing or funding, and future access to capital;

6.1.6.4 The Group structure, if applicable, and the organisation chart; and

6.1.6.5 Any other relevant factors.

6.1.7 The Company, through its authorised persons, consents to any previous Responsible Persons providing information to the Regulator/Registrar, including their reasons for resignation, retrenchment, early retirement or removal.

6.1.8 Employees and/or Responsible Persons, who wish to report information on fit and proper, confidentially to the Regulator and the Company, may do so, through the independent whistle-blowing process of the Alexander Forbes Group, or through the Company’s Compliance Officer(s).

6.1.9 Refer to Appendix C for specific reporting requirements under the various regulations.


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Appendix A: Detailed Fit and Proper Requirements

In considering the fitness of an individual, the following aspects must be considered:

The educational/professional qualification, knowledge and experience, required to fill the position, and the skills and capacity of the individual, to discharge his/her duties;

Satisfactory past performance, or expertise, in respect of the duties that that person must perform;

This entails the consideration of the knowledge, skills, experience and resources, necessitated by the size and nature of the business;

Considering whether the size, diversity and demographics of the relevant function/committee/board, makes it effective; and

Consideration of the existing composition of the relevant function/committee/board, in question.

In considering the propriety of an individual; enquiries must be made, as to whether the individual has ever:

Been convicted, or be subject to any pending proceedings, which may lead to a conviction, under any law, in any jurisdiction, of:

i. an offence, under a law relating to the regulation or supervision of a financial institution, as defined in the Financial Institutions (Protection of Funds) Act 28 of 2001, or a corresponding offence, under the law of a foreign country;

ii. theft, fraud, forgery, uttering a forged document, perjury, or an offence involving dishonesty, misrepresentation or embezzlement;

iii. an offence, under the Prevention of Corruption Act 6 of 1958, the Corruption Act 94 of 1992, or Parts 1 to 4, or section 17, 20 or 21, of the Prevention and Combating of Corrupt Activities Act12 of 2004, or a corresponding offence, under the law of a foreign country; where the penalty imposed for the offense was or may be imprisonment or a significant fine.

iv. any other offence, committed after the Constitution of the Republic of South Africa, 1996, took effect, where the penalty imposed for the offence, is, or was, imprisonment without the option of a fine;

Ever accepted civil liability for, or has been the subject of a civil judgment in respect of, theft, fraud, forgery, uttering a forged document, misrepresentation or dishonesty, under any law;

Been the subject of frequent or severe preventative, remedial or enforcement actions, including prohibition from operating in the financial services industry, by the Registrar, or any other regulatory authority;

Breached a fiduciary duty;

Impaired ability to discharge the duties in respect of the insurance business of the insurer because of a conflict of interest or any other reason.

Been disqualified, by a court, from acting in the management or conduct of the affairs of any company;

Been a director, alternate director, managing executive, or in a similar position of responsibility, of a company that has been put into liquidation, or been put under business rescue proceedings, or had an administrator or executor appointed, during the period, or previous 12 months;

Been removed from an office of trust, on the grounds of misconduct, involving dishonesty, or for any other reason, other than his/her own request;


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Had a court grant an order, declaring him/her to be delinquent, or placing him/her under probation, in terms of Section 162 of the Companies Act and/or Section 47 of the Close Corporations Act;

At any time, been a party to a scheme of arrangement, or made any other form of compromise, with his/her creditors;

Been found guilty in disciplinary proceedings, by an employer, due to dishonest activities;

Been, or is being, suspended, dismissed or disqualified from acting as a director, managing executive, public officer, auditor or statutory actuary (or his/her alternate), under any law;

Been refused a registration, authorisation, membership or a licence to carry out a trade, business or profession, or has had that registration, authorisation, membership or license revoked, withdrawn or terminated, by a regulatory authority;

Been, or is being, disciplined, reprimanded, or disqualified, or removed, in relation to matters relating to honesty, integrity, or business conduct, by a professional body or regulatory authority;

Been denied membership of any professional body, because of matters relating to dishonesty, integrity, negligence, incompetence or mismanagement;

Been refused the right to carry on, or restricted from carrying on, a trade, business or profession, for which a specific license, registration or other authority, is required by law, in any country;

Been involved with a corporation, which has been privately and/or publicly censured, disciplined, suspended or refused membership or registration, by a stock exchange, futures exchange, other market or regulatory authority;

Been untruthful, or provided false or misleading information to, or been uncooperative in any dealings with, the Registrar or a regulatory authority;

Demonstrated a lack of readiness and willingness to comply with legal, regulatory and/or professional requirements and standards;

Been found to be not fit and proper, by the Registrar or a regulatory authority, in any previous assessments of fit and properness;

Seriously, or persistently, failed to, or be failing to, manage any of his/her financial obligations, including debts, satisfactorily, including:

i. been the subject of a civil judgment, in respect of unpaid debts, which debt remains unpaid, or be the subject of any pending proceedings, which may lead to such a judgment;

ii. been sequestrated, or be the subject of any pending proceedings, which may lead thereto, under the Insolvency Act 24 of 1936, or a corresponding law of a foreign country, and has not been rehabilitated, in terms of that Act or law; and/or

iii. been unable to provide a satisfactory credit record.

Additional enquiries for Significant Owners include, whether a Significant Owner:

Has adequate unencumbered financing or funding, and future access to capital, to fund the Company’s financial soundness requirements, in the event that the Company fails;

Will be able, or likely, to be able to meet any of its financial obligations (including debts), as they fall due;

Has been the subject of a civil judgment, in respect of unpaid debts, which debt remains unpaid; and

Will be able to provide a satisfactory credit record.


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Without limiting the generality of the above criteria; the Company is not likely to be satisfied that a Responsible Person and/or Significant Owners is fit and proper, if:

Has been convicted, or is the subject of any pending proceedings, which may lead to such a conviction, under any law, in any jurisdiction, of the offences listed above;

Has been found culpable, from enquires to any of the above requirements;

Has perpetrated, or participated in, negligent, deceitful, or otherwise discreditable business or professional practices;

Was the subject of civil or criminal proceedings, or enforcement action, in relation to the management of an entity, or commercial or professional activities, which were determined adversely to the person (including, by the person consenting to an order or direction, or giving an undertaking, not to engage in unlawful or improper conduct), and which reflected adversely on the person’s competence, diligence, judgment, honesty or integrity;

Has failed to disclose a conflict of interest, or failed to disqualify himself/herself from deliberations where the individual had a conflict of interest; and/or

Has been debarred, in terms of FAIS.

The following checks must be satisfactorily conducted, and documents must be completed, in respect of prospective individuals, to fill a Key Role, prior to their appointment:

Fit and Proper Person Declaration;

Criminal Check;

Credit Check;

Qualification Check;

Disbarment Check, with the FSB;

If applicable; a check of the Public Register of Disqualified Directors, maintained by the CIPC, in terms of S69(13) of the Companies Act.

Experience Check;

Internet Search – Adverse Information Check.


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Appendix B: Key Role Questionnaire

The Key Role Questionnaire, accompanied by the Curriculum Vitae, should address the following:

The professional qualifications, as well as the previous and current positions held by, and experience gained by, the individual;

Bankruptcy, or winding-up of an entity, in which the individual is, or was, in a Key Role;

Any liability incurred by the individual, as a consequence of unpaid debts;

The suspension, dismissal, or disqualification of the individual, from a Key Role;

Preventive or corrective measures, imposed by an authority, on entities in which the individual is, or was, in a Key Role;

Convictions, or pending proceedings, against the individual, in his/her capacity, in respect of civil or criminal cases;

Convictions in criminal cases, of an entity in which the individual is, or was, in a Key Role;

The outcome of previous assessments of the suitability of the individual, or sanctions or disciplinary actions taken against that individual, by another supervisor;

Any disciplinary action taken against the individual, by a professional organisation, in which the individual is, or was, a member;

Any other fact, or circumstance, that could reasonably be considered to be relevant, in the assessment of that individual.


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Appendix C: Regulatory Requirements

The following regulatory requirements on Fit and Proper, should be adhered to:

A. LTIA and STIA requirements The LTIA and STIA does not specify the fit and proper requirements that must be adhered to. However, it provides for the Registrar to determine the requirements. In this regard, prescribed notification forms must be completed and submitted to the Registrar, by directors, managing directors and public officers, together with supporting documents. In addition, BN 158 of 2015 specifies fit and proper requirements applicable to directors, managing executives, public officers, auditors, statutory actuary, or any of their alternates, as well as significant owners, which requirements have been detailed in this policy. Within Alexander Forbes Group Holdings Ltd, there are registered long-term insurers and a short-term insurer. Therefore, these specific requirements are applicable to these entities and at the Group level.

i. The appointment of a director must be approved by the Registrar and takes effect only if the Registrar approves the appointment.

ii. The Registrar must be notified of a change in director, managing executive, senior manager, head of control function or public officer within thirty (30) days of the change.

iii. The appointee must complete, sign and submit the relevant notification forms (Notification of Appointment, Appoint, Terminate or Resignation Form and Notification of Personal Questionnaire Form) to the Registrar, for approval (together with the supporting documents).

iv. In addition to the above, a criminal, credit and qualification verification must be performed by MIE Background Screening.

v. The details of this procedure are included in the relevant compliance procedure document.

vi. The Registrar will require the termination of an appointee, if they are deemed not to be fit and proper to hold office.

vii. The Registrar must be notified of a change in Risk or Compliance Function within thirty (30) days of the change.

viii. The appointee must complete, sign and submit the relevant notification forms (Application Form: Application to outsource a head of control function in respect of the Risk Management Function or the Compliance Function in terms of Board Notice 158 of 2014) to the Registrar, for approval (together with the supporting documents). The appropriate fee must be paid.

B. CISCA requirements Notice 910 of 2010 determines the specific fit and proper requirements applicable to the managers of collective investment schemes. Within the Company, Alexander Forbes Investments Unit Trusts Limited (AFIUT) is a manager of collective investment schemes. Therefore, these specific requirements are applicable to AFIUT.

i. The notice prescribes specific requirements for the appointment of the board of directors, fit and proper requirements for each director, operational and financial soundness requirements for the manager of collective investment schemes


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(AFIUT), management and supervision, risk management and complaints resolution.

ii. Prior written approval must be obtained from the Registrar, for appointment of directors submission must be made to the regulator at least 30 days prior to appointment.

iii. Annexure B to Notice 910 of 2010, supporting documents and the prescribed fee, must be completed and submitted to the Registrar, for each director (including proposed new directors).

iv. Annexure C to Notice 910 of 2010 and the prescribed fee, must be completed and submitted to the Registrar, for each outgoing director, within one (1) month of the termination of the appointment.

v. The financial soundness requirements include, but are not limited to, the capital adequacy requirements, as determined in Board Notice 91 of 2014 (for managers of collective investment schemes in securities) and Board Notice 84 of 2015 (for managers of collective investment schemes in hedge funds).

vi. The capital adequacy reports must be submitted to the Registrar, in the prescribed format, monthly, within fourteen (14) business days.

vii. A written statement, signed by the chairperson or managing director, describing the compliance and/or non-compliance with Notice 910 of 2010, must be submitted to the Registrar, annually, within ninety (90) days after the financial year end.

C. FAIS requirements Board Notice 106 of 2008, as amended, determines the specific fit and proper requirements applicable to financial services providers (FSP) within the Group. Therefore, these specific requirements are applicable to all FSP’s

i. The notice prescribes specific requirements for the personal character qualities of honesty and integrity, competency (experience, qualifications, FAIS regulatory examinations and Continuous Professional Development), operational ability and financial soundness of the FSP, Key Individuals and/or Representatives.

ii. The competency and financial soundness requirements differ, according to the license categories of the FSP.

iii. A compliance report must be submitted to the Registrar, bi-annually, within one (1) month (for Category III FSPs), annually (for Category I FSPs) or two (2) months (for other FSPs), after the reporting date.

iv. The Registrar must be notified of a change in director, managing executive within fifteen (15) days of the change.

v. The FSP must submit a notification of change in the form of a letter or email.

D. FICA requirements The FICA does not specify the fit and proper requirements that must be adhered to. However, it provides for the supervisory body (FSCA) to determine whether a person is fit and proper to hold office in an accountable institution. Within the Company, there are accountable institutions. Therefore, these specific requirements are applicable to the accountable institutions.

E. PFA requirements Directive PF 5 determines the specific fit and proper requirements applicable to principal officers. The PFA also requires members of the board of trustees, and pension fund


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administrators, to be fit and proper. The below sets out the specific requirements that are applicable:

i. Directive PF 5 provides that the principal officer must have the necessary skills, knowledge and experience, to perform their duties, as well as have personal characteristics of honesty and integrity.

ii. The board of trustees are responsible for the appointment of the principal officer, and must be satisfied that he/she is fit and proper to hold the office of principal officer, and must annually review the fitness and propriety of the principal officer.

iii. The Registrar will require the termination of an appointee within 30 days of notifying the board of trustees, if the appointee is deemed not to be fit and proper to hold office.

iv. The outgoing principal officer must submit Annexure C to Directive PF 5, to the Registrar, within 21 days of the termination of appointment.

v. The incoming principal officer must submit Annexure A and Annexure B to Directive PF 5, to the Registrar, within 30 days of the appointment.

vi. Pension fund administrators must have personal character qualities of honesty and integrity, competence, operational ability and financial soundness.

vii. The Registrar may direct a board member to vacate office, or may replace a board member, if the board member is deemed not to be fit and proper to hold office.

viii. Section 7A of the PFA stipulates that every fund shall have a board consisting of at least 4 board members, at least 50% of whom, the members of the fund shall have the right to elect. The composition of the board shall, at all times, comply with the requirements of the rules of the fund, and any vacancy on the board shall be filled within the prescribed period. Notice 3 of 2016 prescribes that any vacancy on a board must be filled within 90 days from the date on which the position became vacant.

F. CA requirements The CA determines the specific standards of conduct applicable to directors, alternate directors, prescribed officers, board committee members and audit committee members (all defined as “director”). The CA requirements are applicable to and all the South African registered subsidiaries of the Company.

i. The standards of conduct include, but are not limited to, acting in good faith and for a proper purpose, acting in the best interests of the company, acting with the degree of care, skill and diligence that may reasonably be expected of such a person.

ii. The CA prescribes specific criteria that determines a director (broad definition) to be ineligible or disqualified to serve or act. A company must, not knowingly, permit an ineligible or disqualified person to serve or act as a director.

iii. Changes to directors must be submitted to the CIPC on a Form CoR 39, within 10 business days after the change.

Appendix D – Known limitations and planned developments

Known Limitations

There are currently no known limitations of this Policy.


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