SAIA appoints new Manager

SAIA MEDIA RELEASE

15 June 2010

SAIA appoints new Manager: Image & Reputation

Yvette Francis was appointed as the new South African Insurance Association (SAIA) Manager: Image and Reputation on 1 June 2010.

This position was previously held by Ms Viviene Pearson, now SAIA Manager: Motor.

“Image & Reputation has been a key priority area addressed by the SAIA for the past four years,” says Barry Scott, SAIA Chief Executive, “however, the SAIA Board Committee: Image & Reputation have agreed on a new strategy for 2010.”

“It was important to appoint the right person to manage and implement the Image & Reputation strategy as the key elements will contribute greatly to building a strong reputation for the short term insurance industry and the SAIA in the future. Yvette was appointed into this new position after a thorough high level interview process,” adds Barry.

Ms Francis says, “A tremendous amount of work has gone into developing the Image & Reputation strategy at the SAIA and I look forward to not only bringing this vision to life but also to elevate the profile of the short term insurance industry in the country.”

Yvette is committed to following the collaborative model that the SAIA has always adopted whenever possible to address the various key priorities identified in the Image & Reputation strategy.

Adéle Joubert
SAIA Public Relations Officer
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Office: (011) 726 5381

SAIA appoints new manager to address the sustainability of motor insurance

SAIA MEDIA RELEASE

7 April 2010

SAIA appoints new manager to address the sustainability of motor insurance

Viviene Pearson was appointed as the new South African Insurance Association (SAIA) Manager: Motor, from 1 April 2010. This position was created as a result of a SAIA Board decision to address the sustainability of motor insurance through an approved SAIA strategy.

“The sustainability of motor insurance is an important issue for the industry, for South Africans who own motor vehicles as well as for the country at large. It is for this reason that the SAIA Board approved motor insurance as another key priority area to be addressed by the SAIA,” says Barry Scott, SAIA Chief Executive.

“It was important to appoint the right person to manage this new priority area as a matter of urgency as the issues that we face are huge. Viviene Pearson, previously SAIA’s Image and Reputation Manager, was appointed into this new position after a thorough high level interview process. Viviene has achieved various important objectives for the SAIA during the six years she has been with SAIA, and I have no doubt that she will be equal to the enormous task ahead,” he added.

The SAIA Board has approved a strategy developed to enable the SAIA to achieve sustainable and affordable comprehensive vehicle insurance and to contribute to safe road practice. In order to achieve this objective, the SAIA will be embarking on a proactive role in facilitating collaboration across stakeholders that will positively impact affordable comprehensive motor insurance as well as contribute to safe road practice. In addition, the SAIA will need to embed solutions in various focus areas to ensure sustainability of these solutions.

“I look forward to making a difference in this important key priority area, and to add value to the SAIA and the industry in my new capacity,” says Viviene Pearson.

Viviene also emphasizes that the SAIA has always followed a collaborative model whenever possible and that she will continue to use this very effective method to address the various key areas identified in the strategy.

To arrange an exclusive interview with Viviene Pearson, contact:

Adéle Joubert
SAIA Public Relations Officer
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Office: (011) 726 5381

Termination of binder agreements and related unilateral cancellation of short-term insurance policies

SAIA MEDIA RELEASE TO INDUSTRY PRESS

7 April 2010

SAIA supports the directive and information letter paraphrased below that was distributed on 31 March 2010 by the Financial Services Board (FSB) to enhance the reporting requirements for all short-term insurers and collate information from them in the event that they terminate binder agreements. This includes those cases where the binder termination results in a unilateral cancellation of a book of policies in terms of Rule 7.3 of the Short-term Insurance Policyholder Protection Rules (PPR) made under section 55 of the Short-term Insurance Act, 1998 (Act No. 53 of 1998) (STI Act).

Binder agreements are agreements whereby a registered short-term insurer allows a third party to do one or more of the following on behalf of that short-term insurer:

• Enter into, vary or renew a short-term policy, other than a short-term re-insurance policy;
• Determine the wording of a short-term policy;
• Determine premiums under a short-term policy;
• Determine the value of policy benefits under a short-term policy;
• Settle claims under a short-term policy.

It has come to the attention of the Registrar of Short-term Insurance (Registrar) that, on occasion, the termination of binder agreements by short-term insurers has led to a situation whereby an intermediary continues to collect premiums for its own account and settle claims, thereby rendering insurance business without being registered as a short-term insurer in contravention of section 7 of the STI Act, placing policyholders at risk.

Termination of the binder agreement by the short-term insurer is also commonly accompanied by a unilateral cancellation of the book of policies administered by the binder holder. In these instances it has also been found to be the case that the requirements of Rule 7.3 of the PPR are not properly compiled with.

Reporting requirements

The enhanced reporting requirements outlined in the directive, that is available on the FSB website, are designed to improve the effectiveness of enforcement of compliance with Rule 7.3 of the PPR and to prevent the risk of unregistered insurance business following the termination of a binder agreement.

Short-term insurers are directed under section 4(2) of the STI Act to furnish the Registrar with information from the effective date of 1 April 2010:

• By completing a form prior to the termination of a binder agreement

This form is to be completed and submitted by the Public Officer of the registered short-term insurer to the Registrar’s office:

• If terminated by the insurer, 40 days in advance of the actual date of termination of the binder agreement’
• If terminated by the binder holder, within 2 days after receiving the notice from the binder holder.

• By completing a form prior to the unilateral cancellation of policies related to the termination of a binder agreement

This form is to be completed and submitted by the Public Officer of the registered short-term insurer to the Registrar’s office 30 days in advance of the issuing/publication of the notice referred to in Rule 7.3 of the Short-term Insurance Policyholder Protection Rules (PPR).

The forms are available on the FSB website. Completed forms must be addressed to the Insurance Compliance Department in the Registrar’s Office as follows: This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Financial Services Board, PO Box 35655, Menlo Park, Pretoria, 0102.

Additional information

The additional information called for in an information letter, that is also available on the FSB website, will assist the Registrar’s Office in monitoring compliance with Rule 7.3 of the PPR and to deal with unregistered insurance business that followed the termination of a binder agreement and related unilateral cancellation of polices.

Short-term insurers are hereby required under section 4 (2) of the STI Act to furnish the Registrar with information on binder agreements and related unilateral cancellation of policies that were terminated or cancelled during the two years immediately preceding 1 April 2010.

Separate forms should be completed for each binder agreement and for each book of policies that were terminated. The forms are available on the FSB website. The Public Officer must submit the information to the Registrar’s Office as follows by 1 June 2010: This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Financial Services Board, PO Box 35655, Menlo Park, Pretoria, 0102.

Compliance

The failure to provide the specified information by or within the timeframes specified constitutes an offence under section 65 of the STI Act and a contravention of the Act that may be referred to the enforcement committee in accordance with the Financial Institutions (Protection of Funds) Act No. 28 of 2001.

SAIA urges all short-term insurers to bring this information to the attention of their appointed auditors.

Fit and Proper competency requirements and failure to comply

SAIA MEDIA RELEASE TO INDUSTRY PRESS

7 April 2010

The South African Insurance Association (SAIA) supports the information published in recent Financial Services Board (FSB) circulars regarding the Financial Advisory and Intermediary Services Act (FAIS) Fit and Proper competency requirements and the debarment when sole proprietors (FSPs), key individuals and representatives fail to comply.

SAIA urges all financial services providers to comply with the necessary requirements and expectations as paraphrased below to protect policy holders.

Background

When reading the Fit and Proper requirements together with the provisions in the FAIS Act, Section 13(2)(a)(b) of the FAIS Act states that an authorised financial services provider must at all times be satisfied that the provider’s representatives, and key individuals of such representatives, are, when rendering a financial service on behalf of the provider, be competent to act, and comply with the requirements contemplated in paragraphs (a) and (b) of section 8(1) and subsection (1)(b)(ii) of this section, where applicable; and take such steps as may be reasonable in the circumstances to ensure that representatives comply with any applicable code of conduct as well as with other applicable laws regarding conduct of business.

In the determination of competency requirements, Section 2 of part III of the FAIS Act, states that subject to paragraphs (3) to (7), an FSP of any category and, where applicable, any key individual and/or representative of such FSP must comply with the applicable minimum experience requirements; have the relevant qualification; have successfully passed the relevant first and/or second level Regulatory Examination(s), as may from time to time be set by the Registrar and comply with the CPD requirements.

Date of first appointment: 2004 to 2007

In terms of the FAIS Act, people appointed between 2004 (when the Act went into effect) and 31 December 2007, must have met the relevant qualification requirements by 31 December 2009.

Date of first appointment: 2008 – 2009

The competence requirements for representatives, who were appointed for the first time in respect of a specific product category in 2008 or 2009, are provided for in Part 10 of the Determination of Fit and Proper Requirements for Financial Services Providers.

Representatives with a date of first appointment in 2008, have a choice of either completing an appropriate skills programme by 31 December 2011 or a qualification by 31 December 2013.

Failure by a representative to meet the competency requirements by the relevant date could result in penalties imposed by the FSB.

Failure to comply with the qualification requirements

The outcome of the failure to comply with the qualification requirements suggests that the representative is no longer fit and proper in terms of section 8(1) of the FAIS Act.

In terms of section 14(1) of the FAIS Act, an authorised financial services provider must ensure that any representative of the provider who no longer complies with the requirements referred to in section 13(2)(a) or who has contravened or failed to comply with any provision of this Act in a material manner are dealt with in the correct way and immediately take steps to ensure that the debarment does not prejudice the interest of clients of the representative, and that any unconcluded business of the representative is properly concluded.

Debarment in terms of the Act means that such representatives are prohibited from rendering any new financial service by the financial services provider withdrawing any authority for the representatives to act on behalf of that provider. The provider should also ensure that the representative’s name and the names of the relevant key individuals are removed from the register referred to in section 13(3).

Section 3 of the FAIS Act states that, subject to the provisions of this Act, any notice given, approval or exemption granted, determination made, requirement or condition determined or imposed, or any other decision taken by the Registrar under an enabling provision of this Act, is valid only if it is reduced to a durable written or printed form or, where communicated electronically, has been correctly transmitted in a legible form.

Appropriate action by the FSP

The Registrar of Financial Services Providers has deemed it proper that if the FSP (sole proprietor) or key individual does not meet the required qualifications or appropriate skills programme as specified in Table E, Part 10 of the Determination of Fit and Proper Requirements for Financial Services Providers, the FSP may do as follows:

In respect of a FSP:

• Request a profile change to remove the product/s for which the FSP is not qualified for; or
• If the FSP does not meet any of the qualification requirements, request the Registrar to lapse the license.

In respect of a key individual:

• Request a profile change to amend the approval of the key individual to remove the product/s for which the key individual is not qualified for; or
• If the key individual does not meet any of the qualification requirements, request the Registrar to amend the approval of the key individual in its entirety to reflect the fact that the key individual does not meet any of the requirements.

If a representative does not meet the required qualifications or appropriate skills programme, the FSPs may do as follows:

• Debar the representative and request the Registrar to list the latter on the list of debarred persons; or
• Request a profile change to remove the product/s for which the representative is not qualified for; or
• Remove the said representative from the register of the particular FSP and subsequently request the Registrar to remove that representative from the central register.

In terms of condition 1 of the licensing conditions imposed on FSPs, an FSP is required to inform the Registrar within 15 days of any change to its licensing conditions. This means that the FSP is required to inform the Registrar of the failure to meet the qualification requirements by a FSP (sole proprietor) or key iIndividual within 15 days after the due date for meeting the relevant qualification requirements.

Where FSPs have failed to inform the Registrar of any instances as described above by 15 January 2010, in respect of the 31 December 2009 deadline, the Registrar will accept such notification up to and including 30 April 2010. Any omissions in this regard will be regarded as a failure to comply with Section 8 of the Act, and the Registrar will take regulatory action.