FSCA to act against insurers who refuse business interruption claims; Covid-19 soars in Gauteng; JP Markets

By Jackie Cameron

  • Gauteng, the richest province in South Africa, has become the centre of the country’s coronavirus outbreak. The region, location of economic hub Johannesburg and capital city Pretoria, surpassed the Western Cape after a strict nationwide lockdown was relaxed, triggering an influx of people returning to work. About 225 000 cases of Covid-19 have been reported in South Africa – more than 75,000 in Gauteng and about 73,000 in the Western Cape. The latter reports the highest number of Covid-19 deaths, with more than 2,000 people succumbing to the disease. About 480 have died of Covid-19 in Gauteng.
  • South Africa’s manufacturing output fell 49.4% year on year in April during a nationwide lockdown, says Reuters. Factory production was down 44.3% in April month on month and declined 16.9% in the three months to the end of April, Statistics South Africa said.
  • The Financial Sector Conduct Authority (FSCA) has filed an urgent application with the High Court to liquidate JP Markets for trading in over-the-counter derivatives without a licence. It says it believes that JP Markets has contravened financial sector laws, including but not limited to running an unlicensed over-the-counter derivatives provider (ODP) business. “All ODP providers need to be licensed by the FSCA. The investigation into the activities of JP Markets is currently on-going. Members of the public are reminded that derivatives-platform trading is a high- risk investment option,” it says.
  • The FSCA has slammed insurers that have refused to pay out business interruption claims and says it will take action. It says it is “concerned about the behaviour of some insurers who are deliberately avoiding paying business Interruption claims where no grounds exist to do so.” In a statement it says: ” The National Lockdown cannot be used by any insurer as grounds to reject a claim. Such conduct goes against the principles of treating customers fairly and breaks down confidence and trust in the insurance sector. The FSCA has communicated this view to insurers and will take action against those that do not treat their customers fairly. One of the key principles underlying the Twin Peaks reforms is that of treating customers fairly, where products are designed to meet customers’ needs; are sold in such a way that customers understand what they are buying; and unfair barriers such as fine print or unfair proof of claims are not put in the way of customers exercising their rights in terms of those policies.” Santam has refused to pay out for business interruption, while OUTsurance has been honouring claims from businesses.