Discovery Group

Group Conflict of Interest Policy

Contents
1. INTRODUCTION .......................................................................................................................................................... 4
1.1 PURPOSE ........................................................................................................................................................... 4
1.2 SCOPE ................................................................................................................................................................ 4
1.3 IMPLEMENTATION ............................................................................................................................................ 5
PART A ................................................................................................................................................................................ 5
1. WHAT IS A CONFLICT OF INTEREST? .......................................................................................................................... 5
2. APPROACH TO THE MANAGEMENT OF CONFLICTS OF INTEREST ............................................................................ 6
A. EMPLOYEES ....................................................................................................................................................... 6
B. BUSINESS UNIT EXECUTIVES.............................................................................................................................. 6
C. DIRECTORS, PRESCRIBED OFFICERS AND COMMITTEE MEMBERS ................................................................... 7
D. CONTROL FUNCTIONS ....................................................................................................................................... 7
E. MANAGING INTRA-GROUP CONFLICTS OF INTEREST ....................................................................................... 7
3. PRINCIPLES RELATING TO SPECIFIC CONFLICTS OF INTEREST ................................................................................... 7
A. GIFTS AND ENTERTAINMENT FROM TRADING PARTNERS ................................................................................ 7
B. GIFTS AND ENTERTAINMENT PROVIDED TO TRADING PARTNERS ................................................................... 9
C. INSIDER TRADING ............................................................................................................................................ 10
D. RECRUITMENT ................................................................................................................................................. 10
E. MOONLIGHTING .............................................................................................................................................. 10
F. PROCUREMENT ............................................................................................................................................... 11
4. COMPLIANCE WITH PART A ..................................................................................................................................... 11
PART B – FAIS ACT ............................................................................................................................................................ 12
1. INTRODUCTION ........................................................................................................................................................ 12
1.1 PURPOSE ......................................................................................................................................................... 12
1.2 SCOPE.............................................................................................................................................................. 12
2. GENERAL PRINCIPLES ............................................................................................................................................... 12
A. WHAT IS A CONFLICT OF INTEREST FOR PURPOSES OF THE FAIS ACT? .......................................................... 12
B. FINANCIAL INTERESTS: TIED REPRESENTATIVES ............................................................................................. 13
C. FINANCIAL INTERESTS: INTERMEDIARIES ........................................................................................................ 14
3. MANAGEMENT OF CONFLICTS OF INTEREST ........................................................................................................... 15
A. AVOIDING CONFLICTS OF INTEREST ................................................................................................................ 15
B. MANDATORY DISCLOSURE .............................................................................................................................. 15
C. TRAINING AND AWARENESS ........................................................................................................................... 15
D. CONFLICT OF INTEREST REGISTER AND REPORTING ....................................................................................... 15

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 2 of 18

4. COMPLIANCE WITH PART B ..................................................................................................................................... 16
ANNEXURE A: DEFINITIONS FOR PURPOSES OF PARTS A AND B ...................................................................................... 17

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 3 of 18

1. Introduction
The board of directors (“Board”) of Discovery Limited (“Discovery”/ “Discovery Group”) is committed to doing business
in an honest and ethical manner. The Board recognises the need to ensure that all business relationships are founded
on professional principles and that relationships are kept at arm’s length, meaning that the parties in the relationship
are independent and otherwise unrelated.

The Board recognises its obligation to oversee that appropriate controls and procedures are implemented within
Discovery Group. These controls and procedures will assist the Discovery Group in meeting regulatory requirements
both in South Africa and internationally.

1.1 PURPOSE

The purpose of this policy is to provide a framework for the prevention of conflicts of interest as far as reasonably
possible. Where conflicts are unavoidable, the policy provides guidelines on how to deal with the conflicts in an ethical
and responsible manner and mitigate potential risks.

1.2 SCOPE

This policy consists of two parts.

Part A of this policy applies to Discovery and its South African and international subsidiaries. This includes:
 All executive and non-executive directors
 Senior managers
 Full-time, part-time or temporary employees
 Independent contractors or consultants, and
 Legal entities controlled by, benefitting from or acting on the instruction of any of the persons listed above.

Both Part A and Part B apply to all South African domiciled subsidiaries registered as financial services providers under
the Financial Services and Intermediary Services Act, 2002 (“FAIS Act”), including all representatives and key individuals..

Each entity within the Group must have processes and procedures in place to align its operations with the spirit and
purpose of Part A. An entity within the Group may elect to place reliance on the processes and procedures of another
subsidiary or to outsource its responsibilities to a third party. Such reliance must be documented in a written
arrangement and any outsourcing must comply with the Group Outsourcing Policy. Despite placing reliance on another
subsidiary or outsourcing of any responsibilities, accountability for compliance with this policy remains that of the
relevant entity within the Group.

An entity within the Group may elect to have its own Conflict of Interest Policy in respect of financial crime risk
management considering its nature, scale and complexity, and the legislation under which it operates.

Such a policy must be consistent with this policy, specifically Part A, and the Board of Discovery Limited must approve
any deviation from this policy unless the deviation is necessary to ensure compliance with legislative and regulatory
requirements, in which case the approval is automatically granted, if the board of directors of a subsidiary has
communicated the need for such a deviation to the Discovery Board.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 4 of 18

Definitions of terms used in Parts A and B are set out in Annexure A.

1.3 IMPLEMENTATION

The Ethics Office

The Ethics office is responsible for managing Part A of the conflicts of interest policy.

The Ethics Office has the following responsibilities:

 Maintaining the Central Gifts Register on behalf of the Group (excluding Bank, that keeps its own register) and
submitting reports to the Social and Ethics Committee (or appropriate board committee) every quarter
 Driving awareness and providing appropriate training on this policy
 Maintaining and reviewing the contents of the Conflict of Interest Register every quarter and, where necessary,
adopting internal procedures to mitigate future conflict of interests
 Establishing procedures that provide evidence that the persons described in paragraph 1.2 comply with this policy.
o This must include annual declarations by all persons referred above.

Where an international subsidiary of Discovery does not have an Ethics Office, the duties and responsibilities of the
Ethics Office, as described above, must be performed by that subsidiary’s Compliance function.

Compliance Function
Group Compliance is responsible for managing Part B of the conflicts of interest policy in respect of Discovery’s South
African domiciled subsidiaries registered as financial services providers under the FAIS Act.

PART A

1. What is a conflict of interest?

A conflict of interest occurs when there is a direct or indirect conflict, in fact or in appearance, between the interests of
a person described in paragraph 1.2 and the interests of Discovery. It applies to financial, economic and other interests
in any opportunity from which Discovery may benefit, or which may be to the detriment of Discovery, including the use
of Discovery’s confidential information.

Actual conflict arises in situations where financial considerations or other personal or professional considerations
compromise an individual’s objectivity, judgment, integrity, and/or ability to fulfil his or her responsibilities to Discovery
and his or her actions could lead to compromising Discovery in any way.

Apparent (or perceived) conflicts are situations or relationships that could reasonably appear to other parties to involve
a conflict of interest. Apparent conflicts exist in situations where a person has financial interests, personal relationships
or associations with an external entity, individual or organisation, such that the person’s activities within Discovery could
appear to be biased. This applies to the following people:
 A person described in paragraph 1.2
 Any family member of a person referred to in paragraph 1.2 above
 A close personal relation.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

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Potential conflicts refer to situations that do not necessarily constitute or appear to constitute a conflict of interest, but
where there is a reasonable possibility of an actual or apparent conflict of interest arising in the near future.

Any reference to a conflict of interest in this policy includes an apparent or potential conflict of interest.

2. Approach to the management of conflicts of interest

As a general rule, conflicts of interest must be avoided at all times. Where it is impossible to avoid a conflict of interest,
the conflict must be disclosed to the appropriate persons and managed in accordance with this policy.

A. EMPLOYEES

Employees must avoid conflicts of interest where they have an interest in or stand to benefit from any transaction to
which Discovery is also a party. This applies whether the employee has an interest or stands to benefit:
 Individually
 In association with their family members
 In association with business partners
 In relation to external or internal business interests.

Employees must disclose any business interests that may be in conflict with the business of Discovery. Non-disclosure
of a conflict of interest may result in disciplinary action against the employee.

All employees must report a perceived or actual conflict of interest to their direct line manager or any senior manager
in their business unit. If an employee cannot report the conflict to his or her line manager or a senior manager in their
business unit, the employee may report the conflict to the Ethics Office.

All instances of non-compliance must be reported in line with the applicable whistleblowing policy and process. This
process outlines that there are three avenues available to Discovery employees to report a concern:
1. Reporting to your direct manager
2. Reporting directly to a responsible department
3. Reporting anonymously via the independent Whistle Blowing Hotline or the EthicsDefender application.

Reference must be made to the Whistleblowing Policy for further detail on ways to report non-compliance.

B. BUSINESS UNIT EXECUTIVES

The head of each business unit has the following responsibilities:

 Ensuring that the staff members in their business unit are aware of the contents of this policy and that they
participate in training initiatives
 Prescribing internal procedures consistent with this policy for the employees of each business to manage conflicts
of interest where necessary
 Actively seeking to identify, mitigate and document conflicts of interest in their business unit, including any conflicts
of interest in connection with any current or planned activities
 Assessing any conflicts of interest reported or disclosed to them to determine if a conflict of interest exists
 Consulting the Ethics Office, where necessary, and determining the best course of action to resolve, manage or
avoid the conflict of interest, including further escalation to a higher management authority where necessary

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

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 Reviewing – every year or more regularly, if required – any reported conflicts of interest to ensure these are being
managed in accordance with any agreed course of action.

C. DIRECTORS, PRESCRIBED OFFICERS AND COMMITTEE MEMBERS

At the beginning of each governing body or committee meeting, all members have to declare whether any of them has
any conflict of interest in respect of a matter on the agenda. Subject to legal provisions, any such conflicts should be
managed proactively, as determined by the governing body.

If a director of a company has a personal financial interest in a matter to be considered at a board meeting, or knows
that a related person has a personal financial interest in the matter, the director must, among other things, disclose the
interest and its general nature to the board before the matter is considered at the meeting. If the director is present at
the meeting, he or she must then leave the meeting immediately after making the required disclosures. The director
may not vote on the matter in question.

Where the chairperson of a board or board committee may have a conflict of interest or a perceived conflict of interest
that may impact on that chairperson’s independent decision making, a lead independent director must be appointed
by the remainder of the board or board committee to chair that specific meeting.

Directors must be particularly careful to avoid representing Discovery Limited or a subsidiary of Discovery in any
transaction with any party with whom there is any outside business affiliation or relationship. They must also avoid
using their Discovery contacts to advance their private business or personal interests at the expense of Discovery, its
clients or affiliates.

D. CONTROL FUNCTIONS

Control functions should operate without conflicts of interest; where a conflict arises, it must be brought to the
attention of the Board for resolution.

E. MANAGING INTRA-GROUP CONFLICTS OF INTEREST

The Group Governance Framework provides a process for the resolution of any potential intra-Group conflicts of
interest.

3. Principles relating to specific conflicts of interest

A. GIFTS AND ENTERTAINMENT FROM TRADING PARTNERS

Receiving gifts or invitations to events is often an important part of maintaining and developing business relationships.
In order to maintain sound working and business relationships with all trading partners, the Board has adopted the
principles detailed below.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 7 of 18

All gifts from trading partners should be free from undue influence and given in the ordinary course of business. The
persons described in paragraph 1.2 of the Introduction, are prohibited from soliciting, accepting or receiving any gifts,
whether directly or indirectly, other than in accordance with the guidelines below:

Category Definition Requirements

Cash or cash Cash, cheques, coupons, bank deposits, No employee is permitted to accept any cash or
equivalents stock, loans items of a redeemable value, cash equivalents from a trading partner.
gift certificate or any similar item.

Gifts Branded promotional items, such as No approval is required, and these gifts do not
branded pens, calendars and memory have to be recorded in the relevant Gifts and
sticks, received from time to time. Entertainment Register.

If more than one gift is received from the same

trade partner in a three-month period, all gifts
received from that trade partner must be recorded
in the relevant Gifts and Entertainment Register.
This is irrespective of the value of the gifts, and
approval is required from the responsible line
manager.

Non-branded promotional items with an No approval is required, and these gifts do not
estimated value of less than R500 (or the have to be recorded in the relevant Gifts and
equivalent of this amount in the Entertainment Register.
applicable jurisdiction).
If more than one gift is received from the same
trade partner in a three-month period, all gifts
received from that trade partner must be recorded
in the relevant Gifts and Entertainment Register.
This is irrespective of the value of the gifts.

Non-branded promotional items with an Approval is required from the responsible line
estimated value of more than R500 but manager, and the gift must be recorded in the
less than R1 000 (or the equivalent of relevant Gifts and Entertainment Register.
these amounts in the applicable
jurisdiction). If more than one gift is received from the same
trade partner in a three-month period, all gifts
received from that trade partner must be recorded
in the relevant Gifts and Entertainment Register.
This is irrespective of the value of the gifts.

Non-branded items with an estimated Approval is required from the responsible

value of more than R1 000 (or the executive and the gift must be recorded in the
equivalent of this amount in the relevant Gifts and Entertainment Register.
applicable jurisdiction).

Business gifts Valuable items, offered without Approval is required from the responsible
obligation, as an expression of executive and the gift must be recorded in the
appreciation or goodwill. relevant Gifts and Entertainment Register.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 8 of 18

 Category Definition Requirements

Events and Invitation to a hosted event, including Approval is required from the responsible
hospitality travel arrangements, with an estimated executive and the event and hospitality details
value of more than R500. must be recorded in the relevant Gifts and
Entertainment Register.

Travel and Paid for or partly paid for trips by trading Any travel by an employee, at the invitation of a
accommodation partners for product updates and / or trading partner will only be allowed if the travel
training. costs is paid for by Discovery, unless the invitation
is to a hosted event and part of the invitation
include travel arrangements.

Approval is required from the responsible

executive and the gift must be recorded in the
relevant Gifts and Entertainment Register.

Gifts and invitations have to be disclosed in the relevant Gifts and Entertainment Register, even in cases where the gifts
and entertainment were offered but not accepted from trade partners.

Where a decision was made regarding the acceptance of a gift or entertainment, the nature of the decision must be
communicated to the trade partner in writing as soon as possible. This applies regardless of whether the decision was
made to decline or accept the gift or entertainment. This is important for the preservation of Discovery’s corporate
integrity and ethical standards.

B. GIFTS AND ENTERTAINMENT PROVIDED TO TRADING PARTNERS

The giving of gifts, or invitations to events, is often an important part of maintaining and developing business
relationships. In order to maintain sound working and business relationships with all trading partners, the Board has
adopted the principles detailed below.

All gifts should be for a genuine purpose, free of undue influence and given in the ordinary course of business. The
persons described in paragraph 1.2 of the Introduction are prohibited from providing any gifts to a trading partner other
than in accordance with the guidelines below:

Category Definition Requirements

Cash or cash Cash, cheques, coupons, bank deposits, No employee is permitted to give any cash or cash
equivalents stock, loans items of a redeemable value, equivalents to a trading partner.
gift certificate or any similar item.

Gifts Branded promotional items, such as May only be provided if approved by the executive
branded pens, calendars and memory responsible for the business unit prior to ordering
sticks, received from time to time. the items. Approval is also required from the cost
centre manager. Relevant details of these gifts
must be recorded in the relevant Gifts and
Entertainment Register.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 9 of 18

 Category Definition Requirements

Non-branded promotional items of any Approval is required from the relevant executive
value. responsible for the business unit and the cost
centre manager.
Relevant details of these gifts must be recorded in
the relevant Gifts and Entertainment Register.

Business gifts Valuable items, offered without Approval is required from the responsible
obligation, as an expression of executive and the gift must be recorded in the
appreciation or goodwill. relevant Gifts and Entertainment Register.

Events and Invitation to a hosted event, including Approval is required from the responsible
hospitality travel arrangements. executive and the event and hospitality details
must be recorded in the relevant Gifts and
Entertainment Register.

Travel and Paid for or partly paid for trips to trading Approval is required from the responsible
accommodation partners for product updates and / or executive and the gift must be recorded in the
training. relevant Gifts and Entertainment Register.

C. INSIDER TRADING

All persons described in paragraph 1.2 of the Introduction are able to acquire knowledge regarding the results of the
company before the results are published. The Companies Act (71 of 2008) and the Financial Markets Act (19 of 2012)
state that any person who trades directly or indirectly in a security based on unpublished price-sensitive information
can, in certain circumstances, be guilty of an offence. The Share Trading & Price Sensitive Policy sets out the rules and
guidelines for any transaction involving Discovery Limited securities. It also provides a framework to manage securities
transactions that may be seen as insider trading.

D. RECRUITMENT

Discovery does not approve of nepotism and understands that all applicants have the right to apply for vacant positions.
Therefore, where family members, friends or business associates of a person referred to in paragraph 1.2 of the
Introduction apply for vacant positions, the guidelines contained in HR policies and processes must be followed.

E. MOONLIGHTING

Moonlighting refers the situation where someone holds a second job while in the service of their employer. All persons
described in paragraph 1.2 of the Introduction who engage in moonlighting activities must ensure that they do not get
involved in any activity that could lead to a potential conflict of interest.

To avoid potential conflicts of interest, employees must follow the procedures outlined in the HR policies and processes.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 10 of 18

F. PROCUREMENT

The persons described in paragraph 1.2 who are involved in procuring goods and services on behalf of Discovery may
not directly or indirectly accept any reward from any person. This applies whether the reward is for themselves or for
any other person. The persons may also not provide, offer or make available any gift or invitation to an event that will,
or can be perceived to:
 Influence the recipient’s judgement on a specific matter
 Cause the recipient to favour one client, supplier or trading partner over another
 Expect the recipient to take certain actions or expect the recipient not to take any action
 Influence the recipient to conduct himself or herself in a certain manner.

When on-boarding suppliers through procurement procedures, all procurement departments must avoid any conflicts
of interest between Discovery, the interest of its stakeholders and the business of the person performing the outsourced
activity. If this is not possible, procurement departments must mitigate these conflicts of interest.

It is the responsibility of the direct managers of procurement staff to collect annual declarations from their staff
members confirming that no reward was or will be collected from any person as discussed above.

Disciplinary steps will be taken against any person who accepts any reward that is subject to the above, whether for
himself or herself, or on behalf of any other person.

If any person knows about or suspects a contravention of this section, he or she must report it to the Ethics Office.

4. Compliance with Part A

Discovery views any non-compliance with this policy and its obligations in terms of legislation in a serious light.

The Ethics Office (or where no Ethics Office is established, the Compliance function) must monitor compliance with this
Part. Any breach or perceived breach of or non-compliance with this policy must be communicated to the relevant
executive as soon as possible. The relevant executive, with input from key stakeholders, will consider the appropriate
action required. If the executive and stakeholders cannot reach an agreement on the appropriate action, the matter
must be escalated to the Ethics Office. The Ethics Office will decide whether the breach or non-compliance is sufficiently
material to be escalated further, and if so, where it should be escalated to.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 11 of 18

PART B – FAIS Act

1. Introduction

1.1 PURPOSE

Financial services providers (FSPs) authorised under the FAIS Act must take all necessary steps to eliminate any practices
and services that may create a conflict of interest between their interests and the interests of an existing or potential
client. The General Code of Conduct for Authorised Financial Services Providers and Representatives under the FAIS Act
(GCOC), details the regulatory requirements for conflicts of interest.

The GCOC requires all FSPs to disclose to their clients the existence of actual and potential conflicts of interest.

The purpose of this Part of the Policy is to address conflict situations that may arise between Discovery, its registered
representatives, other independent FSPs and Discovery clients.

This Part establishes a framework within which actual or perceived conflicts of interest must be identified, reported and
addressed. It also determines the appropriate steps required to manage or mitigate the risk associated with such
conflicts.

1.2 SCOPE

Part B of the policy applies to the following FSPs, and their registered representatives, within the Discovery Group:
 Discovery Life Limited
 Discovery Health (Pty) Limited
 Discovery Life Investment Services (Pty) Limited
 Discovery Insure Limited, and
 Discovery Bank Limited.

Throughout this Part, any reference to a Discovery FSP will mean any of the entities referred to above, whether
individually or collectively.

2. General principles

A. WHAT IS A CONFLICT OF INTEREST FOR PURPOSES OF THE FAIS ACT?

In relation to the rendering of a financial service to a client, a conflict of interest is any situation in which a FSP or a
representative has an actual or potential interest that may:
1. Influence the objective performance of the FSP or representative’s obligations to that client
2. Prevent a FSP or representative from rendering an unbiased and fair financial service to that client
3. Prevent a FSP or representative from acting in the interests of that client.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 12 of 18

Such interests include, but are not limited to:
 A financial interest, which means:
o Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel,
hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than an ownership
interest or training that is not exclusively available to a selected group of representatives.
 An ownership interest, which means:
o Any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other
than equity or a proprietary interest held as an approved nominee on behalf of another person; and
o Any dividend, profit share or similar benefit derived from that equity or ownership interest.
 Any relationship with a third party, which means any relationship with:
o A product supplier
o Another FSP
o An associate1 of a product supplier or a provider
o A distribution channel; and
o Any person who in terms of an agreement or arrangement with a person referred above provides a financial
interest to a provider or its representatives.
 An immaterial financial interest is any financial interest with a determinable monetary value, the aggregate of which
does not exceed R1000 in any calendar year from the same third party in that calendar year received by:
o A provider who is a sole proprietor; or
o A representative for that representative's direct benefit;
o A provider, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial
interest paid to its representatives.

A Discovery FSP must ensure that immaterial financial interests received by any tied representative are declared on the
respective Discovery FSP’s conflict of interest register.

B. FINANCIAL INTERESTS: TIED REPRESENTATIVES

A Discovery tied representative refers to a representative of a Discovery FSP, where the Discovery FSP and the product
supplier are the same legal entity2. A tied representative will include a person that is employed or mandated by a
Discovery FSP to render financial services to that FSP’s Discovery Group clients.

A Discovery FSP may not offer any financial interest to a representative of that FSP:
 Where the interest is determined with reference to the quantity of business without also giving due regard to the
delivery of fair outcomes for clients. Discovery must demonstrate that the determination of and entitlement to the
financial interest considers measurable indicators relating to the:
o Achievement of minimum service level standards in respect of clients
o Delivery of fair outcomes for clients
o Quality of the representative’s compliance with this Act.
The above measurable indicators must be agreed upon between the Discovery FSP and the representative.

1 “Associate” is defined in Annexure A

2
Example – representatives on the Discovery Life FSP license, marketing and selling Discovery Life products.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 13 of 18

C. FINANCIAL INTERESTS: INTERMEDIARIES

An intermediary refers to a representative of a Discovery FSP where the Discovery FSP is not also the product supplier3,
or a representative of an independent FSP.

A Discovery FSP and intermediaries may only offer and receive specific financial interests from a third party, which
includes the following:
1. Commission authorised under the Long-term Insurance Act (52 of 1998), the Short-term Insurance Act (53 of 1998)
and the Medical Schemes Act (131 of 1998)
2. Fees authorised under the Long-term Insurance Act (52 of 1998), the Short-term Insurance Act (53 of 1998) and the
Medical Schemes Act (131 of 1998)
3. “Other fees” to which the amount, frequency, payment method, recipient of those fees and details of services to
be provided are specifically agreed to in writing by the client and may be stopped by the client at their discretion.
4. Fees or remuneration for services rendered to a third party
5. An immaterial interest
6. Any other financial interest not mentioned above.

The fees referred to in points 3, 4, 5 and 6 above may only be paid if:
 The financial interests are reasonably commensurate (proportionate) to the service being rendered, considering
the nature of the service and the resources, skills and competencies reasonably required to perform it
 The payment of the financial interests does not result in the FSP or intermediary being remunerated more than
once for performing a similar service
 Any actual or potential conflicts between the interests of clients and the interests of the person receiving the
financial interests are effectively mitigated
 The payment of those financial interests does not impede the delivery of fair outcomes to clients.

Discovery may not offer any financial interest to an intermediary:

 That is determined with reference to the quantity of business without also giving due regard to the delivery of fair
outcomes for clients. Discovery must demonstrate that the determination of and entitlement to the financial
interest considers measurable indicators relating to the:
o Achievement of minimum service level standards in respect of clients
o Delivery of fair outcomes for clients
o Quality of the intermediaries’ compliance with the FAIS Act.
 For giving preference to a specific product of a product supplier, where a representative may recommend more
than one product of that product supplier to a client.
 For giving preference to a specific product supplier, where a representative may recommend more than one
product supplier to a client.

3 Discovery Insure FSP will be limited to this section when proving financial interest to representatives of Discovery Life FSP license.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 14 of 18

3. Management of conflicts of interest
A. AVOIDING CONFLICTS OF INTEREST

All representative must ensure that as far as possible, any conflict of interest is avoided. Where a conflict of interest
cannot be avoided:
 Steps must be taken to mitigate the conflict of interest
 The conflict of interest must be disclosed on the respective FSP’s conflict of interest register together with the
reason as to why the conflict could not have been avoided.

B. MANDATORY DISCLOSURE

 A conflict of interest in respect of a client must be disclosed to that client in writing at the earliest possible
opportunity. This disclosure must include the following:
o The conflict of interest in respect of the client
o What has been done to avoid or mitigate the conflict
o Any ownership or financial interest (other than an immaterial financial interest) that Discovery or a
representative of Discovery may be eligible for or become eligible for
o Details about any relationship with a third party that gives rise to conflict of interest. The details must be
sufficient to enable the client to understand the exact nature of the relationship or arrangement and the
extent of the conflict of interest.

 The client must be informed on the Conflict of Interest Policy and where they may access the policy.

C. TRAINING AND AWARENESS

All representatives (existing and new) and key individuals must be made aware of the Conflict of Interest Policy and the
contents thereof. Representatives and key individuals must receive the necessary training on the policy and the policy
must be accessible to all representatives and key individuals.

Key individuals and line managers must ensure that they read and understand this policy, the processes and procedures
outlined in this policy, and any other documents the policy refers to.

Group Compliance will assist in facilitating conflict of interest training as and where required.

D. CONFLICT OF INTEREST REGISTER AND REPORTING

A Discovery FSP must implement and maintain a conflict of interest register and a process for disclosure of a conflict by
representatives.

Key individuals and line managers must ensure that they:

 Log any perceived or actual conflicts of interest on the Discovery FSP Conflict of interest (COI) register, in line with
the respective FSP register requirements
 Report any instance of non-compliance with this policy to Group Compliance.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 15 of 18

In order to monitor on-going compliance with the policy, all representatives, juristic representatives and key individuals
must sign an annual Conflict of interest attestation.

Group Compliance will monitor all disclosures logged on the Discovery conflict of interest registers and will report
annually on conflict of interest, as required by the FAIS Act.

4. Compliance with Part B

Discovery views any non-compliance with this policy and any non-compliance with Discovery’s legal obligations in a
serious light. If an employee or a representative takes any deliberate action to contravene this policy or to breach
Discovery’s legal obligations, the employee or representative will be subject to disciplinary action.

Necessary actions will be taken at management discretion as and when any non-compliance is identified. All instances
of non-compliance with this framework will be included in the regular compliance reporting processes.

Group Compliance will monitor procedures and controls to properly identify and manage potential conflicts of interest,
as far as it relates to a conflict as defined by the FAIS Act.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 16 of 18

Annexure A: Definitions for purposes of Parts A and B
Associate
a) in relation to a natural person, means–
i. a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of
that person;
ii. a child of that person, including a stepchild, adopted child and a child born out of wedlock;
iii. a parent or stepparent of that person;
iv. a person in respect of which that person is recognised in law or appointed by a Court as the person legally
responsible for managing the affairs of or meeting the daily care needs of the first mentioned person;
v. a person who is the spouse, life partner or civil union partner of a person referred to in subparagraphs (ii) to
(iv);
vi. a person who is in a commercial partnership with that person;
b) in relation to a juristic person:
i. which is a company, means any subsidiary or holding company of that company, any other subsidiary of that
holding company and any other company of which that holding company is a subsidiary;
ii. which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means
any member thereof as defined in section 1 of that Act;
iii. which is not a company, or a close corporation as referred to in subparagraphs (i) or (ii), means another
juristic person which would have been a subsidiary or holding company of the first-mentioned juristic person
(aa) had such first-mentioned juristic person been a company; or
(bb) in the case where that other juristic person, too, is not a company, had both the first-mentioned juristic
person and that other juristic person been a company;
iv. means any person in accordance with whose directions or instructions the board of directors of or, in the
case where such juristic person is not a company, the governing body of such juristic person is accustomed
to act;
c) in relation to any person:
i. means any juristic person of which the board of directors or, in the case where such juristic person is not a
company, of which the governing body is accustomed to act in accordance with the directions or instructions
of the person first-mentioned in this paragraph;
ii. includes any trust controlled or administered by that person.

Director means a member of the board of a company within the Discovery Group or an alternate director. This includes
any person occupying the position of a director or alternate director, even if such a position is called something else.

Conflict of Interest
Means any situation in which a provider or a representative has an actual or potential interest that may, in rendering a
financial service to a client:
a) influence the objective performance of his, her or its obligations to that client; or
b) prevent a provider or representative from rendering an unbiased and fair financial service to that client, or from
acting in the interests of that client, including, but not limited to–
i. a financial interest;
ii. an ownership interest;
iii. any relationship with a third party;

Distribution Channel
Means:
a) any arrangement between a product supplier or any of its associates and one or more providers or any of its
associates in terms of which arrangement any support or service is provided to the provider or providers in
rendering a financial service to a client;
b) any arrangement between two or more providers or any of their associates, which arrangement facilitates, supports
or enhances a relationship between the provider or providers and a product supplier;
c) any arrangement between two or more product suppliers or any of their associates, which arrangement facilitates,
supports or enhances a relationship between a provider or providers and a product supplier;

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 17 of 18

Financial Interest
Means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel,
hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than–
a) an ownership interest;
b) training, that is not exclusively available to a selected group of providers or representatives, on:
i. products and legal matters relating to those products;
ii. general financial and industry information;
iii. specialised technological systems of a third party necessary for the rendering of a financial service; but
excluding travel and accommodation associated with that training;
c) a qualifying enterprise development contribution to a qualifying beneficiary entity by a provider that is a measured
entity;

FSC
Means the Financial Sector Code published in terms of section (1) of the Broad-Based Black Economic Empowerment
Act (Act 53 of 2003), as amended from time to time.

Immaterial financial interest

Means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1000 in any
calendar year from the same third party in that calendar year received by:
a) a provider who is a sole proprietor; or
b) a representative for that representative's direct benefit;
c) a provider, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial
interest paid to its representatives;

Measured Entity
Has the meaning assigned to it in the FSC insofar it relates to a qualifying enterprise development contribution.

Ownership Interest
Means:
a) any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than
equity or a proprietary interest held as an approved nominee on behalf of another person; and
b) includes any dividend, profit share or similar benefit derived from that equity or ownership interest;

Provider
Means an authorised financial services provider, and includes a representative.

Qualifying beneficiary entity

Has the meaning contemplated in the FSC insofar as it relates to a qualifying in enterprise development contribution.

Qualifying enterprise development contribution

Has the meaning assigned to it in the FSC.

Third Party
Means:
a) a product supplier;
b) another provider;
c) an associate of a product supplier or a provider;
d) a distribution channel;
e) any person who in terms of an agreement or arrangement with a person referred to in paragraphs (a) to (d) above
provides a financial interest to a provider or its representatives.

Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06. Companies in the Group are licensed insurers and
authorised financial services providers.

Group Conflict of Interest Policy Page 18 of 18