FIC Act Compliance for Life Insurers in South Africa: Beneficiaries, Reporting and Prudential Authority Sanctions (2026)

Short answer: Under the Financial Intelligence Centre Act, 2001 (the FIC Act or FICA), only insurers carrying on life insurance business are accountable institutions (Schedule 1, item 8); non-life insurers and reinsurers are not. A life insurer registers with the Financial Intelligence Centre (FIC), runs a board-approved Risk Management and Compliance Programme (RMCP), and files risk returns with the Prudential Authority (PA) twice a year. It must obtain a beneficiary's details when the beneficiary is named and verify them before pay-out, and it reports suspicious transactions, cash above R49,999.99 and terrorist property to the FIC. From 2024 to 2026 the PA published six sanction decisions against life insurers, totalling R40.1 million.

This guide is for compliance officers, money laundering reporting officers, claims and new-business teams and boards at South African life insurers, and for the advisers who sell their products. It is a practical guide, not legal advice: the Act, the Regulations, the FIC's guidance and the PA's directives are the authoritative texts.

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Which insurers the FIC Act covers

Since 19 December 2022, item 8 of Schedule 1 covers "a person who carries on a 'life insurance business' as defined in the Insurance Act, 2017 (Act 18 of 2017), but excludes reinsurance business as defined in that Act". Before that it covered long-term insurance business under the Long-Term Insurance Act, 1998. The Insurance Act's life insurance classes are:

• risk and fund risk;
• credit life;
• funeral;
• life annuities;
• individual and fund investment;
• income drawdown;
• reinsurance, which item 8 excludes.

Not covered: "non-life insurers and reinsurers are not accountable institutions under the FIC Act", as the PA puts it. They still have the suspicious transaction reporting duty in section 29, which applies to every business.

Advisers and brokers who advise on or intermediate life insurance investment products are accountable institutions in their own right, under item 12 (financial services providers), and the Financial Sector Conduct Authority (FSCA) supervises them.

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The Prudential Authority as supervisor

The PA, part of the South African Reserve Bank, is the supervisory body for item 8. The FSCA delegated life insurers' AML/CFT supervision to it in 2018, it began inspecting them in February 2019, and Schedule 2 has named it directly since December 2022.

• Inspections: 17 at life insurers since February 2019, and 4 in 2025/26.
• Findings: 9 at 2 insurers in 2022/23, and 40 at 6 insurers in 2023/24 (PA Communication 2 of 2025).
• Tools: the PA expects life insurers to use "appropriate detection and sanction-screening tools and enhanced monitoring techniques". It does not approve RMCPs.

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Registering with the FIC and filing risk returns

Registration. Every accountable institution registers with the FIC on goAML (section 43B), and failing to register is an offence. The PA has sanctioned a life insurer for failing to register. The FIC had 206 item 8 registrations at 31 March 2026, more than the number of licensed life insurers, because groups register several times.

Risk returns. Under PA Directive D4/2022, life insurers file money laundering, terrorist financing and proliferation financing risk returns through the PA's Umoja portal twice a year: for the second quarter by 31 July, and for the fourth quarter by 31 January. The returns are mandatory: in 2024 the PA cautioned an insurer and fined it R200,000 (wholly suspended) for filing one late.

See our guide to goAML registration with the FIC.

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Beneficiaries: due diligence at nomination and before pay-out

The 2021 FATF evaluation found that South African law had "No CDD requirements for the beneficiary of life insurance and other investment related insurance policies". Two instruments now cover it.

PA Insurer Directive ID1/2022 (15 December 2022):

• obtain the beneficiary's identification particulars as soon as the beneficiary is "identified, designated, or amended by the client";
• before the policy pays out, surrenders and partial surrenders included, carry out a risk assessment and due diligence on the beneficiary;
• take reasonable measures to establish whether the beneficiary, or its beneficial owner, is a politically exposed person;
• consider screening beneficiaries against targeted financial sanctions lists;
• set trigger events that prompt a review of the beneficiary's information.

FIC PCC 48 (31 March 2020):

• the nominated beneficiary becomes the insurer's client when the claim vests, and the pay-out concludes a single transaction;
• the policyholder's risk must be assessed, and due diligence completed, before any premium or debit order is accepted.

PCC 48 does not expect full due diligence on a beneficiary at nomination; ID1/2022 requires identification particulars at that point. Follow both.

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Reporting to the FIC

"Days" exclude Saturdays, Sundays and public holidays, and reports go through goAML. In 2025/26 life insurance businesses filed 2,696 STRs and 39 CTRs with the FIC, and the PA says their STR numbers "remain low". When it formally requests them for an inspection, the PA can see copies of an insurer's STRs.

International funds transfer reports (section 31) are filed by authorised dealers, authorised dealers with limited authority, certain financial services providers and the Postbank, and the FIC's list does not include life insurers. Yet the PA's 2025/26 annual report mentions "first-time sanctions related to international funds transfer reports" in the insurance sector, which no published release explains. If your group moves money across the border, check the position with the FIC.

If you use automated monitoring, FIC Directive 5 of 2019 applies: alerts attended to within 48 hours and the STR filed within 15 days of the alert.

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Sanctions screening and politically exposed persons

Screening is where life insurers' sanctions come from:

• the PA found new clients "not screened against the targeted financial sanctions list maintained by the FIC";
• Assupol's sanction included failing to develop processes "to sanction screen all its clients at onboarding";
• Ninety One's RMCP did not cover sanctions screening or screening for prominent influential persons.

The Act's terms are foreign and domestic politically exposed persons and prominent influential persons, with their family members and known close associates (sections 21F to 21H). Screen policyholders at onboarding, beneficiaries when named and again before pay-out, and both whenever the lists change.

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The 2025 life insurance sector risk assessment

The PA's third assessment (December 2025, covering 2022 to 2024):

• Threats: fraud, corruption and bribery, tax evasion and drug trafficking.
• The market: 59 life primary insurers among 85 long-term licences; the five largest hold 71% of about R4.9 trillion in assets.
• Enforcement: five life insurers faced action in the review period, mainly over the RMCP, due diligence, records, training and reporting.

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PA sanctions on life insurers

By our count from the PA's releases, these six decisions imposed R40.1 million, of which R14.8 million was suspended. The PA's first sanctions on life insurers came in July 2020. The Act allows financial penalties of up to R50 million for a legal person (section 45C).

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What comes next

• The PA's 2026 focus for life insurers is the effectiveness of AML/CFT/CPF controls. A non-executive board member presents the evidence at the prudential meeting, or by 31 August 2026 where no meeting is scheduled.
• Guidance Note 7B (3 August 2026) confirms that only the board, or senior management where there is no board, may approve the RMCP, and that this cannot be delegated.
• The FATF. South Africa left the FATF grey list on 24 October 2025, and the next joint evaluation runs from June 2026 to October 2027.
• Beneficial owners of insurers. A draft Joint Standard of the PA and the FSCA (August 2026) would apply fit-and-proper tests to the beneficial owners of financial institutions, insurers included.

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Compliance checklist

1. Confirm which licences and products fall under item 8, and register every accountable institution in the group on goAML.
2. File the PA's risk returns by 31 July and 31 January.
3. Capture beneficiary details when they are named or changed, and verify and risk-assess beneficiaries before pay-out.
4. Screen policyholders and beneficiaries against the targeted financial sanctions list and for politically exposed persons, at onboarding, before pay-out and on list changes.
5. Train claims and new-business staff on your own red flags, not general background: the PA criticised training that covered the grey listing but not the insurer's obligations.
6. Report suspicions within 15 days, including at surrender and claim, and cash above R49,999.99 within 3 days.
7. Have the board approve the RMCP and prepare its 2026 effectiveness presentation.

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Frequently asked questions

Are insurers accountable institutions under the FIC Act?

Life insurers are: item 8 of Schedule 1 covers life insurance business under the Insurance Act, 2017, excluding reinsurance. Non-life insurers and reinsurers are not accountable institutions, but they must still report suspicious transactions under section 29.

Who supervises life insurers for FIC Act compliance?

The Prudential Authority at the South African Reserve Bank. Advisers and brokers who sell life investment products are supervised by the FSCA.

Do life insurers have to verify beneficiaries?

Yes. Under PA Insurer Directive ID1/2022 they obtain identification particulars when a beneficiary is named or changed, and carry out due diligence and a risk assessment on the beneficiary before the policy pays out, including on surrender.

Do life insurers file international funds transfer reports?

The FIC's guidance lists only authorised dealers, authorised dealers with limited authority, certain financial services providers and the Postbank as IFTR filers. The PA has, however, mentioned insurer sanctions related to these reports, so check the position for any cross-border payments your group makes.

What sanctions has the Prudential Authority imposed on life insurers?

From April 2024 to September 2026 the PA published six decisions totalling R40.1 million, the largest on Old Mutual Life (R15.9 million) and Safrican (R13 million), mainly for due diligence, reporting and RMCP failures.

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