SwissFin – SwissSure Newsletter April 2020

Dear Readers,

We welcome you to our first Newsletter for 2020.

We would have loved to share more positive information with you, but matters like the Covid-19 virus, lockdowns, rating downgrades and recession fears fill our newsletter headlines as well.
Our focus in this newsletter is the impact of the virus on your short-term insurance policy, health insurance and migration matters.

As usual, we have also included information for you across the board and this newsletter can be viewed under:

SwissFin – SwissSure Newsletter April 2020

We wish you and your loved ones good health during these challenging times and please do not hesitate to get in touch with us if you have any queries.

Your SwissFin / SwissSure – Team

1. INVESTMENTS

• Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates

2. LOCAL AND INTERNATIONAL FINANCIAL NEWS

• South African Reserve Bank cuts Repo rate
• Local banks block non-resident accounts when your visa expires!
• Executive Summary of the Expropriation Bill

3. TAXATION

• Budget Speech highlights

4. SWISSSURE: SHORT-TERM INSURANCE NEWS

• Is the impact of the Corona Virus covered by my insurance policy?
• Government relief for tourism industry
• Santam provides R 200 Mio. Covid-19 relief to clients and the community
• Vehicle theft scam alert
• MUA offers Cyber Insurance
• HIC: Change of banking details
• Valuation of classic cars
• Renasa: Change of excesses on domestic policies
• Reporting minor motor collision without having to go to the police
• MUA concierge clarification
• HIC withdraws Corona Virus cover

5. IMMIGRATION

• Travel restrictions due to the virus outbreak
• What you urgently need to do once your PR is granted
• Department of Home Affairs has to recognize FIPSA by court order

6. HEALTH INSURANCE

• How does my health insurance cover me against the Covid-19 virus?
• BDAE temporarily accepts no new applications

7. OTHER

• We are working from home and are still open!
• GolfEstateSure at Fancourt and Erinvale
• No more alcohol behind the steering wheel from June 2020!
• New regulations that every South African driver should know about
• We value your comment

Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates >>

SwissSure offers the following rates as of April 2020:

Interest rates ››

Insurance Plans: “Guaranteed income/growth plans” (5 year term), approx. 80% of the income is tax-exempt: ››

Tax-free interest income – maximum investment amounts: ››

R 1 456 000 for taxpayers under the age of 65
R 2 221 000 for taxpayers between the age of 65 and 75
R 2 525 000 for taxpayers over the age of 75

These figures mean that you can invest these amounts in i.e. our money market or fixed deposit offerings and not pay any tax. Couples married in community of property can double these amounts!

Underlying assumptions: 7,0 % effective interest rate and no other income sources.

SwissSure Forex Rates ››

The above table shows that our rates are attractive compared to commercial banks. Over and above, we do not charge any fees when the funds are credited or transferred to another local account.

Should you wish to receive more information on our money market fund offering, the tax-efficient income plans or our forex rates please contact Mr. Tony R. Hug on .

South African Reserve Bank cuts Repo rate ››

On the 15th of January 2020, the Reserve Bank (SARB) announced a reduction in the repo rate by 0.25%. There was even more good news in amongst all the chaos around the world that has been brought on by COVID-19: SARB announced a further cut of 1% on the 20th March 2020 to 5.25% This means that the retail banks in South Africa will in all likelihood also reduce their prime lending rate by 1%. 

By way of example: On a home loan of R 2000000, repayable at a prime interest rate of 9.75% over 20 years, the monthly payment was R 18970.34, which is now R 17674.21 p.m., signifying a reduction of R 1296.13 pm. 

Local banks block non-resident accounts when your visa expires! ››

The South African commercial banks have introduced a new type of account for foreigners. The normal one is a non-resident account and the new one is a Foreign Temporary Resident (FTR) account. The later applies to account holders with longer visas, like 4-year retired person’s visa, work visa, corporate visa, etc.

The expiry date of the account holder’s visa is linked to the FTR account. In terms of Reserve Bank regulations, such account is blocked once the temporary visa expires.

It is therefore of utmost importance, especially with the sluggish handling of visa extensions by the Department of Home Affairs, that you lodge your extension application well in advance. Some banks might give you a grace period of 3 months, if you can provide proof that your extension is pending.
It is equally important that you inform your bank once you have received your permanent residence permit, to have your account converted into a resident account. Failing to do this, will also result in your FTR account eventually being blocked.

Executive Summary of the Expropriation Bill ››

We have seen several reports in the press and on social media recently regarding expropriation without compensation, and we are concerned that the true picture is being obscured by rumours and emotional responses. 
We have found a useful article by the law firm Miltons Matsemela that was recently published. You can click on the following link to read it: https://www.miltons.law.za/executive-summary-of-the-expropriation-bill-with-and-without-compensation-what-you-need-to-know/.
As you will see from the article, we are still very far away from arbitrary land grabs.

Budget Speech highlights ››

It took finance minister Tito Mboweni less than an hour to deliver what has been seen as a “better than expected” national budget on Wednesday 26 February 2020. But the large deficit, debt ratio, primary deficit, the Covid-19 Virus combined with still weak economic growth continue to pose risks for the future.

No significant tax changes will be implemented in 2020/2021, given the weak economy. Here are some of the key points:  

• Personal Income Tax: Above inflation adjustments to the personal income tax brackets resulting in some welcome tax relief for individual taxpayers. A 5.19% increase in the primary, secondary and tertiary rebates provides much-needed relief.
• Medical Scheme Fees Tax Credits: The value of the medical tax credit is proposed to increase by 2.8% from R310 to R319 per month for the first two beneficiaries. The monthly credit for the remaining beneficiaries is to go up from R 209 per month to R 215 per month. The medical aid tax credit has been increased by an amount below inflation to make room to fund the National Health Insurance Programme.
• Corporate Income Tax Rate: Unchanged at 28%. However, the Minister has proposed a broadening of the corporate income tax base. Additional revenues collected as a result of this broadened tax base will be utilised to reduce the corporate tax rate in future.
• Transfer Duty: The exemption threshold for Transfer Duty has been increased from R 900000 to R 1,0 Mio.
• Tax Free Savings Accounts: The annual tax-free savings account contributions limit increases from R 33 000 to R 36 000.
• Foreign Employment Income Exemption: The partial exemption on Foreign Employment Income will be increased to R 1,25 Mio. from the original amount of R 1,0 Mio effective from 1 March 2020.
• Exchange Control Emigration: The concept of emigration through the Reserve Bank of South Africa by South African tax residents will be reviewed and will be phased out by 1st of March 2021.
• Strengthening of SARS: The new SARS Commissioner is focused on the stabilisation of SARS, as well as the restoration of employee confidence and public trust. The Davis Tax Committee will be re-established to assist SARS, with among other things, tax leakages and the setting up of a new centre that will focus on wealthy individuals who have complex
 tax arrangements.
• Further important budget proposals to note:
  There will be an increase in excise duties on alcohol and tobacco by between 4.4% and 7.5%. There are also proposals to tax electronic cigarettes.
  New excise duty on heated tobacco products will be taxed at a rate of 75% of the cigarette excise rate, this has been introduced with immediate effect.
  Proposed increase in the plastic levy to 25 cents per plastic bag.

The income tax tables for individuals for individuals for the tax year 2021 (1 March 2020 to 28 February 2021) are as follows:

Tax Rebates

Tax Thresholds

Comment:

With the projected tax revenue for the coming year running at a deficit at approx. R 400 Bio., the highest over the last 18 years, the Minister has realized that expenditures have to be cut.

One of the measurements is a cut of R 160 Bio. in the public sector wage bill over the next three years.

However these measurements need to be discussed with the Unions, who have already opposed the proposal. Our Finance Minister will have a hard task to balance a weak South African economy.

Is the impact of the Corona Virus covered by my insurance policy? ››

We have been inundated by enquires from clients and therefore would like to give you a short summary:

About all insurance policies have general exclusions like war, terrorism, public disorder, lockouts, diseases etc. Pandemics (i.e. the Corona Virus) and epidemics cannot be found in most of the policies under defined events and are therefore excluded.

Domestic policies:
On a few policies, cleaning costs for contaminated premises could possibly be covered.

Commercial policies:
They generally do not provide cover for the virus, not even under the business interruption section. The business interruption (BI) section is triggered by an event under the fire, buildings combined, office contents, theft or accidental damage section. The virus would not trigger any of these sections.

Guesthouses/BnB policies:
As mentioned under the commercial policies, if there is no BI section selected, there is no possibility of cover.
Santam guesthouse policies only provide cover if the policyholder has opted for the BI section with the extension “contingent business interruption” for the cancellation of bookings.
The BnBSure policy from Bryte and the HIC Hospitality Policy also offers such coverage. However, HIC’s re-insurance company is deleting the cover as from the 20th April 2020.
The guesthouse insurer H&L, a subsidiary of Santam, has also revoked any cover that is related to the Covid-19 virus as from 1 June 2020. All policyholders have already been informed by separate e-mail.

Liability cover:
For commercial policies, liability exposure may arise in particular where companies face claims for allegedly failing to protect their staff from the Coronavirus. Consideration needs to be given to whether such claims would fall within the Compensation for Occupational Injuries and Diseases Act (COIDA) or under any employers’ liability cover. The enquiry would be whether the exposure to the Coronavirus is sufficiently work related. Normally, for example, you cannot claim workers’ compensation for catching a cold or flu at work. The situation would be different with emergency personnel including healthcare workers and the police services responding to an emergency. The factual difficulty will always be in proving causation and that there was a Coronavirus exposure at work rather than elsewhere.

The effect on travel policies is mentioned under the chapter “health insurance.


If you are one of these policyholders with business interruption cover section in place, please register your claims with us.

Government relief for tourism industry ››

We are pleased to inform our guesthouse and BnB owners that the government has launched an assistance program. Small and medium size businesses can apply for a once-off grant because of the virus consequences.

Please click here to download the details.

Santam provides R 200 Mio. Covid-19 relief to clients and the community ››

South Africa’s largest insurer has come to the party along other large companies and is assisting clients who are struggling with premium payments. The funds are distributed to different beneficiaries. Please click this link to read the communique, which was published on 1 April (not a April fool’s joke):

https://santam.everlytic.net/public/messages/view-online/DL9RA8xeuskOwJWB/xbgczs86StiLihvY

Vehicle theft scam alert ››

We are aware of a new scam to steal vehicles which we would like to make you aware of.

The fraudsters target any type of vehicle. Recently, a Lamborghini Urus was stolen in Johannesburg and last seen in Mozambique. Please be careful and report any suspicious behaviour to your nearest police station.
How the scam works:

• A person posing as an employee of a vehicle manufacturer or dealership (referred to as the scammer) calls the vehicle owner to say that there is a recall and that it is not safe to drive their vehicle. The scammer is often well-spoken, very persuasive and can verify the vehicle owner’s details including, for example, when and where the vehicle was bought.
• The scammer goes on to say that the vehicle manufacturer/dealership will not take any responsibility if the vehicle is driven further and malfunctions.
• The vehicle owner is advised that a towing service will be arranged to collect the vehicle and arrangements are made and agreed with the vehicle owner. The vehicle owner is provided with the name of the towing service and advised that the repaired vehicle will be returned within 24 hours.
• The scammer arranges with the towing service to collect the vehicle. In the meantime, the vehicle owner is advised that the repairs are taking longer than expected and is asked to confirm if the vehicle is fitted with a tracking device. If a tracking device is fitted, the vehicle owner is led to believe that it will be temporarily disconnected while the repair is taken place.
• The vehicle is moved to its end destination (often across the border) by which time the vehicle owner realises that the vehicle has been stolen.
  This is a professional scam which several people have fallen victim too. Always call the vehicle manufacturer or dealership back on their landline to verify the authenticity of the recall.

MUA offers Cyber Insurance ››

This term is used more frequently as many people are scammed by cyber theft. With many people working from home these days, the exposure is increasing.
South Africa is attracting the attention of malicious users, putting the country and the people, who rely on digital, increasingly at risk. In September 2017, South Africa was ranked as the 23rd highest attacked country in the world in terms of hacking and cybercrime. By now we have moved up to 6th place! Stats show that 52% of global internet users become victims of cybercrime, with an average monetary loss of R 5866 per incident.

Although cyber security is constantly evolving to address the ever-changing methods of cyberattack, so does the attackers improve their methods to obtain information illegally. Malware is a common method, Malware refers to various forms of harmful software, such as viruses. Once malware is on a computer, it can wreak all sorts of havoc, from taking control of the computer, to monitoring users’ actions and keystrokes, to silently sending all sorts of confidential data (including personal and financial data) from the user’s computer to the attacker’s home base.

Cyber Insurance is designed to address the risk of breaches in cyber security by providing the client with assistance after an attack has occurred.
MUA offers cover for cyber theft, liability and bullying. For more information, please click here to see the policy wording.

Should you wish to obtain a quote, please contact our short-term insurance department.

HIC – change of banking details ››

Policyholder’s monthly premiums will be collected from a new bank account as from 1 March 2020. There are no changes to the insurance cover and the reference number on the client’s bank statement will still reflect “HIC – policy number”.

Valuation of classic cars ››

As from 1st of December 2019, MUA has commenced to do valuations for newly added classic cars to the policies free of charge.

The valuator will visit you at your premises and will issue a binding valuation certificate.

Renasa: Change of excesses on domestic policies ››

The insurer has amended the excess structures. The changes will apply to new business effective as of the 1st of April 2020 and renewals on the 1st of May 2020.

Please click here to read the summary.

Reporting minor motor collision without having to go to the police ››

It is a legal requirement to report motor collisions to the nearest police station. This can now be done online and you do not have to personally visit a police station any longer.
The National Information Traffic System (NATIS) department has opened the Crash Report page to register collisions. The system automatically generates a report for insurance claims.

Please note that this online facility is online for minor incidents. You still need to go to the police should the following occur:
– Accidents in which anyone is injured or killed.
– Hit-and-run incidents
– Accidents in which 5 or more vehicles are involved

To access the page, please click on this link:
https://online.natis.gov.za/crash/#/onlineCrashReport

Please note that you have to submit the online report within 24 hours, and do not forget to send the report with the claim form to our claims department.

MUA concierge clarification ››

We have introduced this fantastic benefit in various newsletters to our clients. As mentioned, the maximum distance to be travelled for the airport transport is 50km. Each extra km over the 50km covered is charged at R 10 per kilometre and is payable in cash to the driver.

HIC withdraws Corona Virus cover ››

The insurer has been informed by their Re-Insurers, that they can no longer provide cover for the Infectious Disease extension on the Business Interruption sections of their Hospitality policy wordings.
The insurer therefore had no choice but to give 30 days of notice to delete the notifiable disease extension under the Business Interruption section.
The following clause (e) will be deleted from your current scope of cover.


“Infectious Diseases / Pollution / Shark Attack / Additional Interruption Extension

Loss as insured by this Section resulting in interruption or interference with the Business due to:
(e) notifiable Disease occurring within a radius of 50 kilometers of the Premises”

This will come into effect from the 20th of April 2020

Travel restrictions due to the virus outbreak ››

There is currently chaos at the Immigration authorities and VFS. We have clients that are stranded because flights have been cancelled, others have expired visa and cannot extend because of the shut-down etc.

The Department has issued the Immigration Directive No. 7 on the 19th of March. Please click here to read the directive. There has been subsequent information in the Government Gazette, which you can read here.

In a nutshell, foreign visitors will be able to extend visitor’s visa until the 31st July, even if the extension period is in excess of 90 days.

The Department has communicated that they will take the unusual circumstance into consideration when dealing with the applications and nobody will be unfairly penalized.
In order to keep up-to-date with the rapid changes, you can visit:

https://www.southafrica.net/gl/en/trade/page/coronavirus-covid-19-south-african-tourism-update
or https://www.who.int/emergencies/diseases/novel-coronavirus-2019/travel-advice

What you urgently need to do once your PR is granted ››

If you are one of the lucky applicants who is issued, after years of waiting, with the permanent residence permit, you need to take the following steps:

– Firstly you need to collect your PR within 12 months. Failing to do so, the permit will be cancelled. We recommend to always collect it as soon as possible.
– Inform your bank that you are now a resident and that your account needs to be converted from “non-resident”. Otherwise you might find your account blocked, as mentioned under point 2.
– Apply for your ID book! This is a must and you are legally bound to follow the process! Please note that one of the PR copies must be used to apply for the ID book within 6 months. We can assist you with the paperwork to apply for an ID, but cannot accompany you to the Department of Home Affairs.
It takes up to 3 months for the ID book to be issued. Please check if all your personal details are displayed correctly.
– Once your ID book is issued, you can apply for a South African driver’s licence within 60 months. Please note that you do not have to hand in your foreign driver’s licence and you can retain it.
– Lock your original PR certificate in the safe and travel with certified copies. The PR is only issued once and if you lose it, you will have to apply for a “proof of PR” which takes up to 12 months. You will only receive a letter proving your PR status and not another certificate.

Please note that once you have PR, your immediate family members (spouse, life partner, children and parents) can also apply for PR.

If you do not apply for an ID book and driver’s licence, there could be several problems facing you:
– On departure and entry into SA, some immigration officials may want to see your ID book. Failing this, they can hold you back for questioning which can result in you missing your flight.
– Another possible problem is your insurance policy and being involved in a motor car accident.
– In terms of the FACTA/CRS banking guidelines, you have to inform your bank if you are a resident or not.

Some of our clients did not apply for the ID book and hence could not convert their foreign drivers licence. This requires them to do the driving test again!
Unfortunately, the possible problems are not always easy to resolve and we appeal to you to apply for your ID.

Department of Home Affairs has to recognize FIPSA by court order ››

Our industry association “Forum of Immigration Practitioners – FIPSA” to which we are members as well, experienced a successful day in Court at the end of January 2020.
After years of waiting, the High Court has ruled against the Department and issued instructions as follows:

– The Department has to delete section 46 in the Immigration Regulations. This means that FIPSA and its members are to be recognized. Officials at the Department and Foreign Missions have to take in instructions lodged by Immigration Practitioners who are representing clients.
– Visa Facilitation Services (VFS), the office that handles submission of applications, may not give advice to any clients, has to adhere to instructions by Immigration Practitioners and only serves the function as a submission office.

You can click here if you want to read the Court order.

How does my health insurance cover me against the Covid-19 virus? ››

Most insurance companies have sent out communication directly to their members.
All of them offer in-hospital cover should you seek treatment. Screening tests are normally only covered if you have added out-of-hospital benefits. Some international plans give you worldwide choice of doctors and hospitals.

Most insurers have further information on their website. You can click on the following links:

Discovery Health – click here

Momentum Health – click here

Fedhealth – click here

Cigna – click here

Bupa – click here

BDAE – click here

Globality:
They have displayed the following on their website: Following the recent developments in connection with the COVID-19 pandemic, Globality Health and its partners have to adapt to the circumstances and the restrictions that apply in many countries. Please rest assured that Globality Health will continue to be available to you worldwide. We apologize for any delays the current COVID-19 situation may cause.

Travel insurance policies: Please note that your normal health insurance policy will not cover any travel related consequences, unless there is an extra benefit added. We refer to our last newsletter in December 2019 where we elaborated on travel insurance policies. Click here

BDAE temporarily accepts no new applications ››

With effect from Friday, 20th March 2020, the insurer will not accept any new applications for health insurance. The cover provided by existing policies is not affected.

Due to the outbreak of the Virus, the Wuerzburger Insurance Company, who underwrites the BDAE plans, has decided to limit their exposure.

We will keep you informed on future developments.

We are working from home and are still open! ››

We would like to inform you that we are operating as normal from our homes.
Our telephone line at the office is not attended, but you can contact any staff member via their e-mail address.

GolfEstateSure at Fancourt and Erinvale ››

SwissSure sponsored the Mixed Open competition at Fancourt on 2 February and the Hope & Light Foundation on Erinvale on 6 March. As usual, we offered the lucky draw with the Chauffeur driven 1957 Bentley to a wine farm for lunch.
The lucky winners were Mrs Maria Ramler at Fancourt and Mrs Chris Runge from Erinvale.
Congratulations to the winners and we hope you enjoy the prize!

No more alcohol behind the steering wheel from June 2020! ››

A new driving law being put in place by June 2020 will make 0% the new legal blood-alcohol limit for drivers, meaning that no one may drink and drive at all.
This law forms part of the Administrative Adjudication of Road Traffic Offences (Aarto) Act proposed by Transport minister Fikile Mbalula.

The National Road Traffic Act (NRA) currently makes it legal for drivers to get behind the wheel of a car with no more than 0,05 gram blood-alcohol concentration per 100 millilitres and 0,24 milligrams breath alcohol content per 1000 millilitres.

With the Aarto Act, individuals may not have a trace of alcohol in their system while driving.
“We are going to be intolerant to drinking and driving. We are going beyond saying there is some percentage – it must be zero percent. It is going to be zero. No alcohol in the blood – and the law is going to bite with regard to that,” Mbalula said.

In addition to the 0% limit, the Aarto act will also be rolling out a new demerit system in the hopes of improving road safety and reducing fatalities. Demerits can be earned for a number of infractions such as driving without a seatbelt or while using/holding a mobile phone, and these infractions carry different weights. For example, drunk driving may earn you six points, while driving without a licence is worth four points.

Those with more than 12 demerits will have their licence suspended. Every point beyond the twelfth demerit will result in three months of suspension.

New regulations that every South African driver should know about ››

The Competition Commission has published guidelines that aim to change anticompetitive service and warranty plans in South Africa.

Currently, the majority of owners of new cars in South Africa are locked into using a vehicle manufacturer’s service centres, repair shops and parts in ‘embedded’ motor and service plans.
If these owners decide to use an independent service or repair provider of their own choice, vehicle manufacturers punish them by voiding their warranties.

This has also locked out independent workshops and service centres, thereby limiting small-to-medium-sized enterprises’ abilities to transform and grow the sector.
The Commission’s guidelines stipulate that consumers will no longer be compelled to conduct in-warranty service, maintenance or repair work only at approved dealers or approved service providers.

The guidelines further state that vehicle manufacturers and approved dealers must allow consumers to fit non-original parts where a specific part’s warranty has expired, without voiding the balance of the motor vehicles warranty.

This is a breakthrough in the adoption of OEE or Original Equipment Equivalent parts, which offer the same standards of safety and quality as their counterpart Original Equipment Manufacturer (OEM) parts, but at a lower cost.

“At the point of sale, dealers and financiers must provide the consumer with details of all inclusions and exclusions included in the Service and Maintenance Plans,” the commission said.
“This will allow consumers to exercise choice regarding whether to purchase the Maintenance or Service Plan and make servicing a more affordable option for South Africans, whilst allowing for more players to provide such Value-Added services for consumers whose vehicles are in-warranty.”

The deadline for submission of comments was the 16 March 2020.
A finalised set of guidelines will ultimately be implemented as part of the Competition Act and will give authorities the power to pursue anti-competitive behaviour through enforcement.

We value your comment ››

Do you want to know about a specific topic, share something with us or comment?
Please feel free to send us an e-mail or so that we can assist you.