During the 1976 Soweto uprisings, the Short-Term Insurance Industry decided that it could no longer underwrite losses arising from politically motivated acts of civil disobedience and unrest of the time as the risk was too high and it was difficult, if not impossible, to purchase reinsurance cover. This resulted in the incorporation of the South African Special Risk Insurance Association (SASRIA) as a Section 21 Company under the old Companies Act (No. 61 of 1973).
The operational structure of Sasria comprised a membership network pool that included all registered Short-Term Insurance Companies that underwrite the fire peril.
Section 6 of the Finance Act No. 94 of 1978 empowered the then Minister of Finance to enter into a Reinsurance Contract with Sasria as a Stop Loss Re-insurer. This Section also aff orded a monopoly to Sasria as the only Insurer with authority to underwrite political perils in the Republic of South Africa. The Reinsurance of Material Damage and Losses Act No. 56 of 1989 had the same eff ect as Section 6 of the Finance Act 94 of 1978.
In terms of Section 10 (i) (t) of the Income Tax Act No. 58 of 1962, Sasria was exempted from paying tax from the date of incorporation. This Section was however repealed, and from January 1996 Sasria became a tax paying entity. Financially, Sasria started with a zero base. Due to lack of worldwide reinsurance coverage, it was reinsured to a limited extent by the Members of Sasria. In addition, the stop loss coverage aff orded by Government gave cover in excess of Sasria’s reserves and reinsurances in an unlimited amount. Initial rates were agreed with the industry as the risks which Sasria covers were actuarially considered to be uninsurable.
At the time, the mission statement was to underwrite any perils that the conventional insurance market was unwilling or unable to underwrite. Consequently, the perils of Sasria were expanded and encapsulated in the Reinsurance of Material Damage and Losses Act No. 56 of 1989 read in conjunction with the Conversion of Sasria Act No. 134 of 1998.
From the mid 1980’s to date, Sasria perils comprised of the following:
i. any act (whether on behalf of any organisation, body or person, or group of persons) calculated or directed to overthrow or infl uence any State or Government, or any provincial, local or tribal authority with force, or by means of fear, terrorism or violence ii. any act which is calculated or directed to bring about loss or damage in order to further any political aim, objective or cause, or to bring about any social or economic change, or in protest against any State or Government, or any provincial, local or tribal authority, or for the purpose of inspiring fear in the public, or any section thereof
iii. any riot, strike or public disorder, or any act or activity which is calculated or directed to bring about a riot, strike or public disorder (the term “Public Disorder” shall be deemed to include civil commotion, labour disturbances or lockouts)
iv. any attempt to perform any act referred to in clause (i), (ii) or (iii) above
v. the act of any lawfully established authority in controlling, preventing, suppressing or in any other way dealing with any occurrence referred to in clause (i), (ii), (iii) or (iv) above.