FINANCIAL SERVICES
LEON LOUW: Meme of insurers as pariahs is a ploy for greater regulation
'Billions of rand and millions of hours are wasted on enforcement and compliance, entry barriers prevent entrepreneurship'
The insurance industry is reprehensible, according to Ismail Momoniat. He should know. As the Treasury’s deputy director-general, he orchestrates its regulatory diarrhoea.
Business Day called one of his regular rants a "scathing attack on the short-term insurance sector". Instead of the industry refuting him at last week’s insurance conference, one of its representatives implicitly endorsed the notion that increasingly draconian regulation, backed by a gigantic bureaucratic empire, should address its "reputational deficit". How bad is the industry, and how negative are perceptions? It depends on the weight attached to facts, feelings or flimflam. This column has explained the fact that supposed financial sector problems and promised benefits have never been defined, quantified and monitored. All we do know is that the opposite of what was once predicted materialised, that billions of rand and millions of hours are wasted on enforcement and compliance, that red tape and entry barriers prevent entrepreneurship and transformation and that artificially curtailed services and regulatory costs imposed on consumers reduce access to cover.We also know that th...
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