Skip to content

COVID-19: Insurance services are considered essential in lockdown

27 March 2020
– 3 Minute Read


South Africa is in lockdown with effect from midnight last night (26 March 2020). This means that, in an effort to mitigate the spread of COVID-19, the movement of people is restricted until midnight on 16 April 2020.

The lockdown will be administered in terms of the regulations relating to the Disaster Management Act, 2002, published on 25 March 2020 (Regulations).

Regulation 11B provides that people are confined to their residences, unless they leave strictly for the purpose of performing an essential service, obtaining an essential good or service, collecting a social grant, or seeking medical attention.

The Regulations also provide that all businesses must cease operations during the lockdown, unless they are involved in the manufacturing, provision or supply of essential services.

In terms of the Regulations ‘insurance services’ are regarded as ‘essential services’.

Insurance services is not defined in the Regulations, but is defined in the Financial Sector Regulation Act, 2017 (FSRA) as:

  • offering, promoting, marketing or distributing;
  • providing advice, recommendations or guidance;
  • operating or managing; and iv) providing administration services in relation to life policies and non-life policies within the Republic of South Africa.

Despite this definition in the FSRA, logic and reason need to be applied. For example, agents visiting clients to sell policies is not an essential service and defeats the spirit of the lockdown.

Regulation 11B(2) provides that the accounting officer or a public institution and the chief executive officer or the equivalent of a chief executive officer of a private institution (head of an institution), must determine essential services to be performed by his or her institution, and must determine the essential staff who will perform those services: provided that the head of an institution may delegate this function, as may be required in  line with the complexity and size of the business operation.

Therefore, the head of an institution, or his/ her delegates, would need to determine the essential services necessary to maintain the functioning of an institution’s essential insurance services, and the staff to perform them. Again, reason and logic need to be applied – the insurance service must maintain stability in the sector but not at all costs or to the detriment of employees.

All people performing essential services must be duly designated in writing by the head of an institution, on a form that corresponds substantially with Form 1 in Annexure C (permit). People issued permits must carry a form of identification to be presented with the permit, otherwise they will have to return to their place of residence.

Download the Regulations and Annexures here.