COFI… compliance today, relicensing tomorrow?
The ongoing evolution of the Conduct of Financial Institutions (COFI) framework remains one of the most significant regulatory developments shaping South Africa’s insurance landscape.
FAnews spoke to Danny Joffe, Head of Legal at Hollard, about how insurers are navigating uncertainty around COFI’s implementation while continuing to strengthen customer conduct and regulatory compliance.
Preparing for COFI amid ongoing delays
With COFI’s timeline still unclear, frustration across the industry is understandable. However, Joffe points out that many insurers are not standing still while awaiting the framework's finalisation.
“Much of what is expected to be in COFI - governance of customer conduct and application of TCF has already been inculcated into most financial institutions, specifically when the new PPRs were introduced in 2018, which already then introduced the concept of product oversight and design, supervision of intermediaries by Insurers and claims and complaints handling. While COFI will bring further oversight and regulation on transformation and relicensing, which will be an onerous process, but insurers and other financial institutions have been pushing customer conduct for some time.”
This perspective suggests that, rather than viewing COFI as a disruptive future event, many insurers see it as a continuation and expansion of existing regulatory principles. The groundwork laid by earlier frameworks has already embedded key conduct principles into day-to-day operations.
Maintaining momentum on conduct and culture
One of the challenges posed by regulatory uncertainty is maintaining focus on internal transformation without a fixed implementation date. According to Joffe, insurers have continued to rely on existing governance structures and regulatory requirements to drive progress.
“There have been governance standards released in the interim on conduct and conflict of interest concerning cell captives, as well as the outsourcing of insurance functions, which insurers have been obliged to comply with, as well as the Binder Regulations and PPRs, which came out in their final forms in 2017 and 2018. This has provided insurers with enough of a basis to properly build their customer conduct models, which will, in all likelihood, mean less major disruption once COFI finally becomes law.”
He further emphasises that the industry has not responded with panic, but rather with measured, structured improvements to customer outcomes.
“It should be emphasised that insurers are not panicking over what will come with COFI. As stated above, much of what is expected is already being implemented through the requirements of other existing legislation. Insurers already have internal areas by which they measure their customer conduct statistics and dashboards dealing with complaints, turnaround times and NFO successes. TCF has been around for a while, enabling insurers and other financial institutions to put in place well-thought-out processes and systems that have drastically improved the customer experience. Institutions like Interna claims adjudicators have made it much easier for customers to challenge decisions or challenge poor service.”
This highlights a key theme: the industry’s shift toward customer-centricity is already well underway, supported by data-driven monitoring and established dispute resolution mechanisms.
Product development, reporting, and regulatory engagement
In addition to cultural and operational changes, insurers have also been refining their product development strategies and reporting frameworks in anticipation of COFI’s eventual rollout.
Joffe explains that compliance with existing regulations has effectively served as a rehearsal for what lies ahead.
“Insurers in responding to the PPRs, changes in governance standards with outsourcing and binder disclosures, and so this work in complying with what already exists (including the BEE legislation) has in many ways prepared insurers for COFI when it comes.”
This preparation extends to engagement with regulators. Despite uncertainty, insurers continue to maintain open lines of communication with supervisory bodies.
“When insurers have the quarterly or half-yearly catch-ups with the FSCA, the passage of COFI is often discussed. It appears that the passage is with parliament at the moment, after the cabinet has approved the bill. The development was confirmed in a statement issued following its meetings of 1 April. There will still be time for further comment in the parliamentary process, but these timelines are not for the FSCA to manage.”
This ongoing dialogue reflects a collaborative approach between industry and regulators, even as the legislative process unfolds at its own pace.
Looking ahead: opportunities and challenges
While uncertainty remains, Joffe is clear about the long-term direction and impact of COFI on the insurance sector.
“COFI will enhance further insurers and other financial institutions' management of customer conduct, which can only be good for the customer and the industry. There has already been substantial improvement with FAIS and PPRs. The worry is that the expense and difficulty in the relicensing of all financial institutions may impact them, but improving customer conduct is necessary for the industry, and most players have bought into this. This has led to the large improvements over recent times and far better engagements with parties such as the NFO and the FSCA complaints areas.”
His comments capture both optimism and caution. On one hand, COFI is expected to reinforce positive trends in customer treatment and accountability. On the other hand, the operational and financial burden of compliance - particularly relicensing - could pose challenges for some players.
Ultimately, the industry appears to be adopting a pragmatic stance: continuing to build on existing regulatory frameworks, investing in customer-centric systems, and preparing incrementally for COFI’s arrival. If Joffe’s insights are anything to go by, insurers are less concerned with the exact timing of COFI and more focused on ensuring they are ready - whenever it comes into force.
Writer’s Thoughts
The true measure of COFI’s success won’t be its legislative finality, but how deeply it entrenches a culture of accountability and fairness in an industry already walking the path. For insurers, the question is no longer if they adapt, but how boldly they’ll lead the change they now know is inevitable. Please comment below, interact with us on X at @fanews_online or email me your thoughts.
