In April 2019 the Financial Sector Conduct Authority (“FSCA”) issued proposals relating to the collection of insurance premium by the insurer directly and not through an independent intermediary (“II”).
Yesterday, the FSCA issued Communication 22 of 2020 (INS) (“communication”) to provide background and inform stakeholders they are invited to comment on the draft exemption notices (“draft notices”) by the deadline, 15 May 2020.
The draft notices aim to give effect to the premium collection proposal by facilitating the payment of remuneration to an II where premium is collected directly into the account of the insurer. Where the technological systems of the II enables the direct collection method, the II may perform certain activities (referred to as accounting for premium) in support of the direct collection.
These draft notices propose what accounting for premium would mean in the case of direct collection of premium and allows remuneration for purposes of these activities only. This is however, subject to the strict conditions set out in the exemption. It includes reporting and oversight requirements on the insurer entering into such an agreement.
Contact us to assist with unpacking the impact of this exemption and drafting comments for submission to the FSCA on or before the deadline.
Director: Fathima Khan-Ahmod
Ahmod Consulting (Pty) Ltd
Ahmod Consulting 