{"id":839799,"date":"2025-10-13T13:00:00","date_gmt":"2025-10-13T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=839799"},"modified":"2025-10-13T12:57:16","modified_gmt":"2025-10-13T10:57:16","slug":"south-africas-largest-insurer-hit-with-r10-million-fine","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/839799\/south-africas-largest-insurer-hit-with-r10-million-fine\/","title":{"rendered":"South Africa&#8217;s largest insurer hit with R10 million fine"},"content":{"rendered":"\n<p>Sanlam Collective Investments (SCI) has been hit with a fine from the Financial Sector Conduct Authority (FSCA) for breaching the Financial Intelligence Centre Act (FIC Act).&nbsp;<\/p>\n\n\n\n<p>The administrative sanctions include a financial penalty of R10.6 million, a directive to address the identified contraventions and a caution against future breaches.<\/p>\n\n\n\n<p>SCI is a registered manager of collective investment schemes and is owned by South Africa\u2019s largest insurer, Sanlam.\u00a0<\/p>\n\n\n\n<p>In March 2024, the FSCA inspected SCI in terms of Section 45B of the FIC Act and saw several issues with compliance with the FIC Act.<br><br>SCI was found to be in contravention of Sections 42(1) and (2) of the FIC Act, where Accountable institutions are required to develop, document, maintain and implement a Risk Management and Compliance Programme (RMCP).&nbsp;<\/p>\n\n\n\n<p>The RMCP identifies, assesses, and mitigates money laundering and terrorist financing risks.<\/p>\n\n\n\n<p>Although SCI had developed an RMCP, it was not implemented, especially in relation to the risk rating of its clients.&nbsp;<\/p>\n\n\n\n<p>The RMCP was also technically deficient in that it did not adequately address the following issues:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Processes for enhanced due diligence on partnerships (section 42(2)(f));\u00a0<\/li>\n\n\n\n<li>Examination of complex or unusually large transactions (section 42(2)(h));\u00a0<\/li>\n\n\n\n<li>Termination of business relationships (section 42(2)(k));\u00a0<\/li>\n\n\n\n<li>Identification and reporting of reportable transactions (sections 42(2)(o) and (p)); and\u00a0<\/li>\n\n\n\n<li>Justification for inapplicable section 42(2) requirements<\/li>\n<\/ul>\n\n\n\n<p>SCI was also in breach of sections 20A, 21, 21A, 21B, 21C, 21E and 21F to 21H, which require accountable institutions to identify and verify the identity of clients and conduct ongoing due diligence on politically exposed persons.&nbsp;<\/p>\n\n\n\n<p>\u201cAt the time of inspection, SCI had not adequately identified or verified some clients and their beneficial owners, nor had it conducted the required ongoing and enhanced due diligence,\u201d said the FSCA.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Not the first time\u00a0<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA-1024x576.jpg\" alt=\"\" class=\"wp-image-779521\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA-1024x576.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA-768x432.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/06\/FSCA.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p>The FSCA also considered SCI\u2019s previous non-compliance with other laws in considering the appropriate sanction.&nbsp;<\/p>\n\n\n\n<p>This included an enforceable undertaking by SCI in section 151 of the Financial Sector Regulation Act, No. 9 of 2017 and a previous contravention of section 4(4)(a) of CISCA, resulting in a financial penalty against SCI.&nbsp;<\/p>\n\n\n\n<p>The FSCA recognised the remedial steps taken by SCI to date, and has agreed to suspend R3.6 million of the R10.6 million penalty for two years.&nbsp;<\/p>\n\n\n\n<p>The suspension is conditional upon full remediation and sustained compliance with the relevant provisions of the FIC Act during the suspension period.<\/p>\n\n\n\n<p>\u201cThe FSCA views the breaches identified at SCI as serious, especially considering the size, complexity and risk exposure of SCI\u2019s business and its position and impact in the South African market,\u201d it said.&nbsp;<\/p>\n\n\n\n<p>\u201cAn effective RMCP is essential not only for protecting institutions from financial crime but also for safeguarding the integrity of the broader South African financial system.\u201d&nbsp;<\/p>\n\n\n\n<p>\u201cProper due diligence of all clients is crucial to help identify and mitigate against suspicious and criminal elements from infiltrating the financial system.\u201d&nbsp;<\/p>\n\n\n\n<p>The FSCA warned that the sanction underscores that it will not tolerate non-compliance with the FIC Act.&nbsp;<\/p>\n\n\n\n<p>Financial institutions operating within large, international financial services groups are expected to demonstrate heightened vigilance in this regard.&nbsp;<\/p>\n\n\n\n<p>This sanction underscores that the FSCA will not tolerate non-compliance with the FIC Act.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sanlam Collective Investments has been hit with a multi-million fine for failing to adhere to the FIC Act. <\/p>\n","protected":false},"author":95,"featured_media":716778,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872,1],"tags":[15212,2880,23804],"class_list":["post-839799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-trending","tag-fsca","tag-sanlam","tag-sanlam-collective-investmetns"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=839799"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839799\/revisions"}],"predecessor-version":[{"id":839806,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839799\/revisions\/839806"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716778"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=839799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=839799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=839799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}