Transcript Document

.....
March 2005
Introduction
This is the first of what we
plan
to
be
a
regular
communication tool with you.
We are
conscious
that
newsletters,
like
notice
boards, tend to be largely
unread – (at least all the way
through), and as such we will
try and be as brief as possible.
If detail is lacking or you would
like more information then
please let us know.
We will, in preference to
rewriting articles that have
appeared
in
other
well
circulated publications such as
COVER and F&A News,
simply refer you to them
where we feel they are of
interest, from any perspective,
not just FAIS or FICA.
We will also be including
details of any specialist
products handled by our
clients, in particular the
Underwriting Managers and
Insurers to give you detail on
possible risk exposures you
may have and who is
available to help you with
them.
We hope you find this tool an
effective one – please tell us if
you do (or don’t) find it useful.
Until your next audit.
The Pretium Team
THIS MONTHS TOPICS
Introduction
Your Annual Report to the FSB
The 2005 Budget
The FAIS Ombud
The FSB and FAIS Ombud Fees
Legal Matters
New Accounting Standards for Insurers
De-capping of Commission for Short
Term Commercial Business
Liability and your Client
Your Annual Report to the FSB
The FSB have released a draft of the report
format for your annual reports to them. As can
be expected it deals with all aspects of the
legislation and requires confirmation that you
have attended to these and in some cases
asks for details of any sampling that has been
done to ensure compliance. Those of you
who have been audited by us already will be
familiar with the content and detail required.
A proposed reporting period has also been
announced. Originally your annual reports
were due 2 months after your financial yearend. This has been changed to a schedule
that deals with the reporting period and date
of submission of the report. The initial
reporting period will be from the date of the
granting of your license to a specified time
based on your financial year-end. The reports
must be submitted within 2 months of the
reporting date.
The following table will provide you with the
dates applicable to you:
Financial Year-end
Reporting Date
31 January 2005
31 July 2005
29 February 2005
31 August 2005
31 March 2005
30 September 2005
30 April 2005
31 October 2005
31 May 2005
30 November 2005
30 June 2005
31 December 2005
31 July 2005
31 December 2005
31 August 2005
31 December 2005
30 September 2005
31 December 2005
31 October 2005
31 December 2005
30 November 2005
31 December 2005
30 December 2005
31 December 2005
The 2005 Budget
This is not our area but we
did get hold of some useful
SARS documents that
gave some insight onto the
changes for individuals,
small businesses and the
motor vehicle allowance
changes – if anyone would
like a copy please let us
know.
The FAIS Ombud
The office is up and running and detail of how they will manage complaints is starting to be
advised. COVER (December) and EXTRACOVER (December/January) provides some
detail that you need to be aware of. Some of the main facts disclosed in these articles are:
The consumer will pay nothing for the service,
You may be asked for a fee per complaint accepted – stated at R1,000,
A complainant has a six month period in which to lodge a complaint,
The Ombud will only deal with a complaint that has been dealt with by you, the FSP,
in terms of that Complaints Handling procedure you now have and he will check that
this has been done once he does receive the compliant himself.
Mr. Charles Pillai, the Ombud, will be writing regular articles in COVER and we are sure we
will continue to get useful information from him in the coming months.
NB: There is legislation pending that will bring all the Ombuds currently operating under one
body. It has been accepted in principle by parliament but the details still needs to be
agreed. (See COVER January 2005 p6.)
The FSB and FAIS Ombud Fees
You will have received our circular relating to the introduction of these fees and many of you
have already had the invoices (which were due to be paid by the 28th February). The next
batch of invoices will deal with FSP’s that have been license in the period 1 January 2005 to
31 May 2005.
Take care – we have noticed that the “rebate” for existing fees paid in terms of Board Notice
54 (credit agents only) have not always been identified and deducted. If this is the case DO
NOT deduct it your self and pay – that will cause confusion – return the invoice, refer the FSB
to your payment and wait for an amended invoice and then pay.
Any other fees you may pay to the FSB, such as those for the use of the word “insurance” in
your trading name must continue to be paid.
It appears the FSB want to have all FSPs paying fees in November each year and that the
fees levied so far only represent about 50% of the annual fees required going forward. With a
deficit of nearly R 27M for FAIS up to 31 March 2004 are we surprised?
Legal Matters
“The following cases were recently detailed in
COVER magazine:
January 2005 P35 by Robert Vivian - Insolvent
estates and the proceeds of a life policy – make sure
your clients do not die intestate.
February 2005 P39 by Maria Philippides – A case
involving the need to comply with risk improvements.
It highlights the role of the broker in ensuring the
client understands such requirements.
February 2005 P51 – The Long-term Ombudsman’s
cases - An investment policy where maturity fell
short of the capital invested and no documents to
support either party’s view – a good filing system is
imperative.
February 2005 P52 – The Short-term Ombudsman’s
cases – One deals with a rejection for a hijacked
vehicle where the driver was not correctly licensed –
the claim was repudiated but the Ombud ruled that
there was no link and asked the insurer to pay up.
P53 gives details of an interesting case involving 2
claims – one fraudulent and one not by the same
insured – can one fraudulent case allow an insurer
to get out of the legitimate claim as well?”
New Accounting Standards for
Insurers
Have a look at the article on p44 of
the December issue of COVER so
you get a feel for what Insurers will
be dealingFeb
with2005
on accounting side –
we are not accountants but it
sounds like hard work and will
ultimately affect you all.
De-capping of Commission for
Short-term Commercial Business
As many of you already know this
issue has been delayed – maybe
indefinitely. The practical effect is
that the disclosure of commission
can be in percentage terms as the
levels remain legislated. An article in
COVER December 2004 p6 – deals
with this issue in more detail as well
as disclosure of fees etc. in general.
Liability and your Client
Established in 2001 as the underwriting manager of specialised liability risks for Hollard
Insurance Company, Camargue has established itself as one of the leading providers of these
specialised covers to the South African market.
Our products are designed to address some of today’s complex issues facing small to medium
private or public enterprises. The products are Directors and Officers Liability, Employment
Practice Liability and Pension Fund Trustees Liability.
We’ve taken liability products originally developed for large corporates and tailored them to the
SMME sector. While the corporates usually have enough fat to respond to this kind of problem,
all too often directors of developing businesses lose everything they have worked for because
of an unwitting error giving rise to shareholder lawsuits or CCMA and Labour Court actions.
As the backbone of the national economy and the answer to South Africa’s unemployment
problems, the SMMEs deserve better protection and our commitment is to help them manage
their risk more adequately. We also include a strong value-added component to our insurance
products by providing our clients with guidance in how to deal with staffing problems and how
best to conform to the King II Report on good corporate governance.
Why you should be interested in selling these products?
There are many reasons:Serves as a door opener for new clients
Proactively protects existing accounts
Generates new income streams from new premium spend
Less Professional Indemnity exposure by minimising gaps in cover
Gives you a tool to review and address the client’s exposure
Allows you to add value to your client
For further information on these products please contact Mitch Marescia or Ken van Sweeden
at Camargue on (011) 356-4842/4845 or email [email protected] or visit our
website at www.camargueum.co.za.
Education – Close-off Dates
A reminder of some close off dates that may be relevant to you if you have opted for either
the Damelin of IISA examination courses as part of your staff development program;
Damelin
Next available session - FAIS I (June 05) FAIS II (August 05)
Close off date for this - FAIS I (May 05) FAIS II (July 05)
Feb 2005
IISA
Next available session - September 05
Close off date for this - 30 March 05
Full details of the programs for both the above providers were sent to you in November last
year by us. If you need a copy call us or contact the organizations concerned on:
Damelin – (011) 403 6600 or web site www.damelin.co.za
IISA – (011) 274 8400 or web site www.iisa.co.za
INSETA have recently held a number of road shows, where, amongst other aspects they
provided details of their preferred service provide in insurance based and INSETA approved
courses, namely INTEC College School of Insurance. They do offer an extensive range of
course. They can be contacted at 0860 10 40 14 or by e-mail [email protected].
Take care when looking at “management courses” in preference to the lower level approved
courses. We recently had a client who wanted to opt for a UCT management course but when
we checked out the NQF level and credit rating found that it had no official standing and
would have had little benefit to the individual in question in attaining his required credits.
There are management diploma options that are INSETA approved/developed but these tend
to be of a longer duration (12 months) and as a result more costly.
We have also come across various insurer run training sessions that have been accredited
and carry various credit levels. Again take care that the course you may attend does not
overlap in any way with existing credits you may have – if so the credits cannot simply be
added together. For example the Santam MMIII course carries credits of 30 at NQF level 4 –
but if you already have the first RPL commercial assessment exam from last year (which
gave you 30 credits) the course will only allow you 20 additional credits – not 30 – you end up
with 50 credits and not the 60 you hoped for. Always ask the provider to clarify this for you
before you sign up.
We understand that the FSB are close to finalizing what the next step in the required
competency standards will be once the first 2/3 year period has expired. It seems that you will
need to attain a “full qualification” – which will mean an escalation to 120 credits at your
appropriate NQF level.
There are some practical issues around this, which the FSB needs to sort out but we are told
they hope to announce the upgraded requirements by mid 2005, which will help in planning
the courses. You need to do so now so that you can easily work towards the ultimate
objective. We are not aware of the time frames that will be allowed to attain these additonal
credits but we are guessing at a similar 3 year maximum thus giving you until 2010 to attain
the goal.
St George’s Park
The Oval
Corner Meadowbrook Lane & Sloane
Street
Bryanston East
PO Box 9655
Devon Valley
Johannesburg 1715
Directors C Ormrod, BD Thomas
Reg.no.2003/029557/07 CO no. CO363
Tel: (011) 463 1573
Fax: (011) 463 1714
E-mail: [email protected]