Consumer Credit in South Africa

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.