High Court rules construction guarantees are insurance; FSCA's boundary vindicated

The Gauteng High Court interdicted Fusion Guarantees (Pty) Ltd from issuing construction guarantees, holding in a 23 March 2026 judgment (Elasah Risk Consultants v National Credit Regulator and Others) that such guarantees meet the definition of non-life insurance under the Insurance Act 18 of 2017: premiums paid, an undertaking triggered by an uncertain event, and indemnification of loss. Fusion had argued its products were credit agreements under the National Credit Act. The court disagreed, and the FSCA's press release of 9 April confirmed its enforcement posture against unregistered insurance business.

The principle extends beyond construction guarantees. A product is classified by its function rather than its corporate structuring, and registration under one regulator does not exempt a product that functions within another regulator's territory. Guarantee-like or indemnity-like products in South Africa's market are subject to this functional test regardless of how they are structured.