FSCA Press Release - HIGH COURT CONFIRMS FUSION GUARANTEES (PTY) LTD (“FUSION”) ARE CONDUCTING UNREGISTERED INSURANCE BUSINESS
FSCA Press Release - HIGH COURT CONFIRMS FUSION GUARANTEES (PTY) LTD (“FUSION”) ARE CONDUCTING UNREGISTERED INSURANCE BUSINESS
The FSCA reported that the Gauteng Division of the High Court confirmed Fusion Guarantees (Pty) Ltd was conducting unregistered insurance business when it issued construction guarantees. The ruling matters because it confirms that the substance of the instrument, not its label or NCA registration status, determines whether a guarantee is regulated as non-life insurance under the Insurance Act.
Key dates
- 2026-04-09
- FSCA press release on Fusion Guarantees and unregistered insurance business
- 2026-03-23
- Gauteng Division of the High Court delivered the judgment referenced in the press release
Suggested considerations
- Compliance teams may wish to assess whether construction, performance, or surety-style products could be characterised as non-life insurance under the Insurance Act.
- Firms may wish to review whether their current authorisations actually cover guarantee products that assume contingent obligations in exchange for consideration.
- Legal and compliance functions may wish to align product documentation, marketing language, and contractual mechanics with the true regulatory character of the instrument.
- Counterparty due diligence processes may wish to verify whether guarantee issuers are authorised as insurers before acceptance of the instrument.
- Boards and senior management may wish to review governance controls for regulatory classification risk around bespoke guarantee products.
What changed
The High Court granted the FSCA’s counter-application and declared Fusion’s construction guarantees to be non-life insurance policies under the Insurance Act. The court held that issuing those guarantees without insurance authorisation breached section 5(1) of the Insurance Act, and it interdicted Fusion from issuing construction guarantees going forward. The court also declared the guarantees referenced by Elasah to be insurance policies and ordered costs against Fusion and Elasah.
Compliance impact
The ruling is a significant enforcement precedent because it confirms that unlicensed issuance of guarantee-like products can be treated as insurance-law contravention, exposing firms to interdicts and costs. The practical consequence is that firms operating near the guarantee, surety, or contingent-obligation perimeter may face regulatory and enforceability risk if they are not licensed for insurance activity.
References
- [1] moonstone.co.za/high-court-rules-construction-guarantees-... third-party
- [2] mexc.co/en-PH/news/1015882 third-party
- [3] scribd.com/document/891900251/FSCA-Regulatory-Actions-Rep... third-party
- [4] moonstone.co.za/high-court-dismisses-constitutional-chall... third-party
- [5] fsca.co.za third-party
- [6] linkedin.com/posts/fscasouthafrica_media-statement-1-apri... third-party
- [7] www2.fsca.co.za/Enforcement-Matters/Documents/GKF%20FINAL... third-party
- [8] webberwentzel.com/News/Pages/construction-guarantees-as-n... third-party
AI-generated analysis. May contain errors or omissions — verify with the original FSCA source before acting. Full disclaimer.