CHANGES TO THE CLIENT SHAREHOLDER AGREEMENTS

3RD PARTY CLIENT WORKSHOP

DATE: 28 NOVEMBER 2018

PRESENTER: MAXWELL SIBANDA (CRO)

INDEX

INTRODUCTION AND BACKGROUND

KEY CHANGES TO THE AGREEMENTS

CONCLUSION AND WAY FORWARD

SLIDE NO: 2

INTRODUCTION & BACKGROUND

INTRODUCTION AND BACKGROUND

Recent legislative changes necessitated a review of various legal agreement templates, including our Client Shareholder Agreements.

Considerations include: SAM legislative regime (i.e. Insurance Act etc) & changes affecting business operations (i.e. capital requirements etc).

Approach: Guardrisk Legal Department facilitated review, working with Webber Wentzel as well as with representatives from within business.

Client Shareholder Agreements were last amended in 2013, to take into account changes introduced through new Companies Act.

SLIDE NO: 4

KEY CHANGES TO AGREEMENTS

SOME OF THE GENERAL CHANGES

SLIDE NO: 6

References to Binder Agreement removed (taking into consideration that Cell Owner Shareholder is not always also a binder holder).

Alignment of standard clauses with those of other templates (i.e. Binder Agreement, Outsourcing and Intermediary Services Agreements).

Provides for risk sharing in respect of a cell (aligned with the definition of cell structure in the Insurance Act).

Insurance business conducted through particular cell. Promoter (cell) may share in experience in line with participation rate specified in Agreement.

Provision made for “Unplanned Solvency Support” as well as for “Unplanned Solvency Support Fees”.

CHANGES: DEFINITIONS & INTERPRETATION

SLIDE NO: 7

Provide more extensive definition for “Applicable Law” to include the Financial Sector Regulation Act, Insurance Act, TCF and POPIA.

Insert definition of “Associate” in line with new legislative requirements.

Alignment of the “Business Rescue” definition with the Companies Act.

Definition of “CAR” removed, replaced with “FSR” (alignment with SAM).

Definitions in respect of the Investment Mandate have been inserted.

CHANGES: DEFINITIONS & INTERPRETATION … continued

SLIDE NO: 8

Insertion of definition of “Dormant Cell”.

Align definition of “Financially Distressed” with the Companies Act.

Insertion of definition of “Data Protection Laws” (align with POPIA).

Insertion of definition of “Financial Sound Condition”.

Insertion of definition of “Eligible Reinsurance Policy”.

CONCLUSION & WAY FORWARD

TIMELINE: ROLL OUT REVISED AGREEMENTS

SLIDE NO: 10

FEB 2019

Complete process of amendments to

the six template agreements

MAR 2019

Communicate details of roll-out plan to

existing clients (phased roll-out).

MAR 2019

Any new clients will be signed up

using the revised templates

MAR 2019 – AUG 2019

Our estimation is that the roll-out of the agreements to our existing clients will take approximately six months (including the process for client consultation).

Consequently, from commencement in March, we expect completion in August.

CLOSING COMMENTS & WAY FORWARD

Changes ensure Agreements in line with latest legislative requirements.

Guardrisk Portfolio Managers & Business Partners will engage clients.

Review of Client Shareholder Agreements (multiple stakeholders & WW).

SLIDE NO: 11

Thank you