Retirement Benefit Fund, Trustee and Third Party Provider Insurance

1. Retirement Benefit Fund, Trustee and Third Party Provider Insurance Teri Solomon

2. The Main Roleplayers

3. The Fund’s Insurance The Fund is covered against loss of fund assets as a result of: • Errors and omissions • Theft and fraud • Third party computer crime Trustees, Committee Members and Principal Officers are covered for their: • personal liability cover in the event of, inter alia, breach of their fiduciary duties

4. The Fund’s Insurance • Loss to the Fund as a result of a Wrongful Act by an “Officer” of the Fund. • Damages, judgments, settlements, costs and expenses awarded against the Insured • Legal costs • All costs and expenses incurred require written consent of the Insurer

5. Some NB Extensions • Advancement of Defence Costs (IFA Funds) • Carveback for 3rd party provider claims (10% sub-limit) (IFA, AMPLATS) • Extended run-off cover for past trustees (36 months). • Adjudicator claims deemed notified from date of first ruling • Cost of reinstating records • Unidentified Officer extension • Claims preparation costds • Mitigation costs (10% sublimit) (IFA Funds) • Regulatory Enquiry Costs (10% sublimit) eg FSB /SARS • Data protection extension • Impersonation Fraud

6. Basic Insurance requirements for The Administrator, The Asset Manager and the Actuary and the Auditor • The Insurance • Professional Indemnity – legal liability based • Commercial Crime incl Social Engineering • Legal defence and other costs • Third Party Computer Fraud • Cyber Liability Insurance • Directors and Officers Liability Insurance • The Risk • Errors/omissions in the performance of the services – Legal Liability • Theft/fraud of own and third party managed funds by employees • Legal Defence and other costs in respect of claims made • Third Party computer fraud - Theft/Fraud of third party assets under care custody and control • Loss of member data following a cyber breach • Personal Liability of the Directors and Officers of the Administrator

7. Typical Exclusions • Fraudulent claims, late notification and material non disclosure • Known circumstances • Circumstances arising prior to the retroactive date • Bodily injury, death, loss of property or destruction therefor • Failure of investments to perform • Fines and Penalties (unless insurable in law) • Other Insurance / More specific insurance

8. The IFA Fund Trustees V the PFA (2018) – Insurance lessons

9. The Amplats Group Provident Fund V Others • 2018 – Adjudicator holds the actuary to the fund liable for a R40m pricing error, exonerates the trustees and the administrator of liability

10. MJ Matsheka & others V Mafikeng City Council Pension Fund 2016

11. Lessons for Trustees • Vett the SLA with ALL third party providers • Make the insurance compulsory in the SLA • Obtain an independent review of the insurances – quantum and scope • Request annual confirmation of cover and premium paid • Ensure trustees are happy any indemnity in the rules • Ensure trustees understand the Fund’s insurances and the terms and conditions • Be prepared to provide evidence of how the Limit was selected • Claims should be a board agenda item and renewal should be round robined

12. THANK YOU