The Registrar of Short-term Insurance (the Registrar) has referred a matter to the Enforcement Committee of the Financial Services Board. We bring the article that was published on www.insurancegateway.co.za

The referral relates to a contravention of section 45 of the Short-term Insurance Act, No. 53 of 1998, (STI Act), read with Regulation 4.1 of the Regulations under STI Act.

Evidence established, inter alia, that during the period from July 2013 to June 2014, Saxum Insurance permitted 20 independent intermediaries to collect premiums in respect of short-term insurance policies underwritten by it without valid guarantees.

As mitigating circumstances, the Registrar considered that Saxum Insurance accepted responsibility for the contravention, rectified the contravention by replacing the invalid guarantees with valid guarantees issued by a bank, and fully cooperated with the Registrar during the enforcement process.

Consequently, the Registrar agreed to a penalty of R200 000.00, which penalty was imposed by the Enforcement Committee on 26 February 2015.

About the Enforcement Committee
The Enforcement Committee is an administrative body that came into operation on 1 November 2008, and was created in terms of section 10(3) of the Financial Services Board Act, 1990. The Enforcement Committee may impose administrative penalties, compensation orders and cost orders on respondents that are found to have contravened any law administered by the Financial Services Board.

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