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Moonstone Monitor - 15 June 2017 |
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Paul Kruger
Author/Editor |
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The illegal we do immediately. The unconstitutional takes a little longer
– Henry Kissinger |
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Distributed to 46 866 subscribers.
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From the Crow's Nest |
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Review Material Terms Regularly |
We recently discussed two determinations made by the Ombud for Financial
Services Providers in which she found that the respondents were lacking in their
duty to provide clients with a reasonable explanation of material terms of their
contracts.
Julian Lavagna of Moonstone Compliance discussed this matter in the Protector
Post, an educational publication for members of Moonstone’s Protector Service
for one person businesses. He used an earlier finding in the JPH Victor v Tectum
Portfolio Services (Pty) Limited determination to provide guidance in what is a
very tricky minefield.
Relevant statutory provision
Section 7(1)(a) of the General Code of Conduct provides that a FSP, other than a
direct marketer, must provide a reasonable and appropriate general explanation
of the nature and material terms of the relevant contract or transaction to a
client, and generally make full and frank disclosure of any information that
would reasonably be expected to enable the client to make an informed decision.
Section 7(1)(c)(vii) of the General Code of Conduct, provides that a FSP, other
than a direct marketer, must, at the earliest reasonable opportunity, provide,
where applicable, full and appropriate information and concise details of any
special terms or conditions, exclusions of liability, waiting periods, loadings,
penalties, excesses, restrictions or circumstances where benefits will not be
provided.
Facts of the case
The complainant insured his motor vehicle with ABSA Insurance via his broker.
About a year later the motor vehicle was stolen and ABSA Insurance elected to
repudiate the claim on the grounds that the insured did not abide by a policy
condition to install a tracking device.
The only condition that the insured was aware of was a gear lock requirement
which was met. On further investigation, it transpired that the broker failed to
communicate two subsequent endorsement schedules from ABSA Insurance for onward
submission to their client. The endorsement required the insured to fit a
tracking device as a condition upon which indemnity against theft and hijacking
would be met.
In its response to the Ombud, the brokerage stated that the initial quote upon
which the insurance was ultimately concluded, had no requirement for a tracking
device. They also stated that it was company policy to inform clients to read
through the policy schedule, so that clients may confirm that the policy meets
with their requirements.
The Ombud ruled that the brokerage was negligent in that they never forwarded
the additional terms and conditions to the insured. It was held that it was
incumbent upon the intermediary to pertinently draw the insured’s attention to
the additional terms on the policy schedule which was not included in the
initial quotations.
The complaint was upheld and the brokerage was ordered to pay the insured an
amount of R87 300.
How does this impact you?
The determination highlights two very important, yet often overlooked themes:
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Are clients made aware of any material terms, special conditions and/or
circumstances in which benefits will not be provided?
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Are the FSP’s internal communication channels functioning effectively?
In terms of the common law there is no general duty on a broker to explain every
clause of the policy to the insured. However, there is a legal duty, not only to
inform the insured of the existence of any onerous policy conditions, but also
to explain the importance of such conditions to the client. Upon renewal the
broker is also required to satisfy himself or herself that there are no material
changes to the policy or the insurable interest (for example, subsequent
improvements to a client’s motor vehicle).
As many repudiations are due to policy conditions that were not met, it is
sensible to point out to a client all conditions and/or circumstances in which
benefits will not be provided and to ensure that these disclosures are
documented (for example, via e-mail or the record of advice).
It will also be sensible to enquire from the client whether there were any
changes to his or her insurable interest at renewal stage and to document the
client’s response.
Recommended controls
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Once your client has accepted a quote, inform your client by way of written
form of any special conditions and/or circumstances in which benefits associated
with the policy will not be provided.
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Inform your client by way of written form to notify you of any changes to his
or her insurable interest (you may wish to add this to your disclosure
document).
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At renewal stage, enquire from the client whether there were any changes to
his or her insurable interest and document the client’s response.
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Ensure that any client instruction or amended schedule is properly documented
and implement a communication feedback loop in order to confirm the proper
execution thereof.
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clients? |
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With offices nationally, we are well-placed to help you.
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e. info@gtc.co.za
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www.gtc.co.za
An authorised Financial Services Provider FSP no. 731. |
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Your Practice Made Perfect |
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Compulsory Compliance Officer Information Update
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The FAIS Registration department at the FSB sent letters to compliance
officers and compliance practices in January requesting that all
relevant details be updated.
The response, according to the department, was extremely poor, with many
letters being returned due to outdated contact details.
If you did not receive this request, it obviously means that there are
problems with your contact details at the FSB.
All compliance officers and compliance practices are urgently requested
to update/confirm the information required by 30 June 2017.
If no confirmation is received, the compliance officers and/or
compliance practices will be viewed as dormant, and will be removed from
the register and their access to the on-line portal will be suspended,
according to the notice.
The details must be confirmed by accurately completing the Confirmation
of CO details document and submitting it to
Fais.COapprovals@fsb.co.za
Enquiries in this regard should also be submitted to this same inbox. |
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Reporting to the FSC Council
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The Financial Sector Charter Council recently approached a number of
people in the industry requesting that they register and submit their
2016 B-BBEE report.
One reader actually submitted the form, together with his exemption
certificate. The response read:
“Your submission is noted. You will still have to report, you will just
state in the report that you are an EME.”
Now, if you were Australian, you may have confused this with their
version of the ostrich, the Emu, which is actually very apt in this
regard. You have three options: Stick your head in the sand, fight them,
or comply. The latter is possibly the best option. Being right will get
you nowhere.
It is not about your records being right – it is about theirs.
Moonstone Compliance reports as follows:
The effective date of the Codes of Good Practice on B-BBEE in terms of
Notice 997 of 2012 was 26 November 2012.
This effectively means that the Financial Services Sector Code is
binding on all stakeholders operating in the Financial Services Sector
as indicted below. Please also note the exclusions listed hereunder.
The Financial Sector Code applies to any natural or juristic person
conducting a business, trade or profession in the South African
financial sector, including, but not limited to, the following:
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Banking
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Long-term insurance
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Short-term insurance
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Re-insurance
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The management of retirement, pension and collective investment scheme assets
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Management of formal collective investment schemes
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Financial Services Intermediation and Brokerage
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Management of investments on behalf of the public, including, but not
limited to, private equity, members of any exchange licensed to trade
equities or financial instruments in South Africa and entities listed as
part of the financial index of a licensed exchange; and
- Underwriting Management Agents
The Financial Sector Code does not apply to:
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Natural or juristic persons who do not have trading operations in the
Republic of South Africa
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The trading operations of natural or juristic persons outside the
Republic of South Africa; and
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Managers of investments on behalf of the public who are not subject to
regulation in terms of the Financial Services Board, for example, money
held in intermediate trusts by lawyers.
If you did not receive a request of this nature, smile and pour a cuppa.
If you did, pour something stronger and make like a river – follow the
route of least resistance. |
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Moonstone Brand Ambassador, Oliver Bekker, excels |
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Oliver Bekker, brand ambassador for Moonstone and Suitebox, saw a
lifetime dream come true when he qualified for the 117th US Open
golf tournament at the Erin Hills course in Wisconsin which starts
today.
Bekker only had two days to get to the course in the UK after two
wins on the Sunshine circuit and a third place in the Zimbabwe Open
saw him move to 227th in the world rankings, and an invitation to
the qualifying tournament. He played a 67 and 66 on the two courses
at the Walton Heath club, placing him first of the SA contenders.
Three other South Africans, Brandon Stone, George Coetzee, and
Thomas Aiken also qualified, while Ernie Els, Charl Schwartzel,
Branden Grace and Louis Oosthuizen will be there, courtesy of
previous achievements.
Bekker, who honed his skills as a youngster in the tough US College
circuit, ascribes his recent upward curve to his wife, Alra, a
qualified PGA coach and mentor, and advice from his new coach,
Llewellyn van Leeuwen, to
trust his natural swing, rather than over-analyse everything.
We are holding thumbs for all our local boytjies, with a bit of a
bias for “our” man in the US Open.
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Technologically Speaking |
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Netwealth AdviceTech Research Report |
A recent report, designed for the Australian advice industry and
technology companies that support it, attempts to sketch the road
ahead. As we appear to be heading down the same rocky road, we may
as well learn from their experience and expertise.
The inaugural Netwealth AdviceTech research report seeks to paint a
picture on how technology is currently being used in the dynamic and
evolving advice industry, and provides insights into key areas of
focus, must-have, high adoption services, and technologies that are
regarded as disruptors, but are not yet being adopted.
This report reflects the importance of both technology and people,
and it is clear in this report that advisers, as practitioners, in
conjunction with solution providers can create great customer
experiences that will broaden the appeal of financial advice.
This inaugural whitepaper is also a ‘line in the sand’ for advice
practices, tech providers and Australian consumers.
The report will help you to compare and asses your technology usage
to peers, and to drive your business plans and strategy.
For tech providers, this report provides hard data on what
technologies advisers like, how they are using them and how they are
planning to spend their tech budgets in the future.
And for Australians, this whitepaper is evidence of the work that is
being done in the Australian advice industry to deliver greater
value and deeper engagement.
Matt Heine, Netwealth Joint Managing Director, notes:
“We hope you enjoy the first
Netwealth AdviceTech Research Report
and that it will help you in future proofing your business.”
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Regulatory Examinations
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Legislation Handbook and
Preparation Guide for REs |
The Legislation Handbook for Level 1 Regulatory Exams provides the
legislation specified as relevant to the regulatory exams RE 1 and 5.
The Preparation guide includes the qualifying criteria provided by the
FSB for these exams.
The qualifying criteria are cross-referenced in the Preparation Guide to
the relevant sections to be studied in the Legislation Handbook.
Shaded tabs enable the user to easily identify the four sections of the
work and the information is then grouped by subject matter area in order
to assist you to find the relevant items quickly and easily.
The 4th edition reflects the law as at 15 April 2015.
Click here to order these
LexisNexis
books from our Advisor Store.
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RE Schedule updated |
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Our venues are filling up fast as we approach 30 June 2017.
Candidates who are obliged to write and pass by the end of June
must please register in time.
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Self-Help Guidelines to make a booking, download your
certificate or view results |
Candidates who wrote with Moonstone can now view their results,
make a new booking or update their information on our website:
www.faisexam.co.za
Here is what you do:
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Click on the Moonstone FAIS Exam website (www.faisexam.co.za)
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Click on the second heading: “Update Your Booking/Personal
Details/Get results”.
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Key in your ID or Passport Number used to register for the
exam: click on Send password.
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The system will
send a password to the e-mail address you provided at
registration.
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Use this password to log in on the same address as above:
Type in the password – do not copy and paste.
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Click login.
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You will then be able to make a booking, download your
certificate or view results.
Frequently Asked RE QuestionsEmail enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants. |
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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The Moonstone website -
www.moonstone.co.za
- enjoys an average of 15 000 visits and approximately 39 000 page views per month. |
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Moonstone boasts an exclusive newsletter mailing list of over 46000
dedicated financial decision makers who receive 2 newsletters per week. |
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
Investment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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Life Insurance
Compliance Officer:
Bidvest Life Insurance, Umhlanga - If you have a minimum of 3 years
experience in the life insurance industry and Compliance Officer
experience, then
Read More
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Financial Planners:
Risk Free Solutions, Port Elizabeth & Kimberley - We are looking for
established, well balanced Financial Planners striving for financial
freedom. If you have matric, your own transport, driver’s licence and RE
qualificaton, then
Read More
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Short Term Insurance
Underwriter:
The Insurance Centre, Westville - We require a commercial and
personal lines short term insurance underwriter / administrator.
Read More
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In Lighter Wyn |
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Ask a stupid question…… |
Yesterday I was at my local grocery store buying a large bag of dog
food for my loyal pet and was in the checkout queue when a woman
behind me asked if I had a dog.
What did she think I had; an elephant? So, since I'm retired and
have little to do, on impulse I told her that no, I didn't have a
dog, I was starting the Dog Diet again. I added that I probably
shouldn’t, because I ended up in hospital last time, but I'd lost 10
kilograms before I woke up in intensive care with tubes coming out
of most of my orifices and IVs in both arms.
I told her that it was essentially a perfect diet because of all the
vitamins and minerals it contained. The way that it works is to load
your pockets with nuggets and simply eat one or two every time you
feel hungry. The food swells in your tummy so you feel full. (I have
to mention here that practically everyone in queue was now
enthralled with my story.)
Horrified, she asked me if I ended up in intensive care because the
dog food poisoned me. I told her no, I stepped off the kerb to sniff
an attractive Irish Setter's behind and a car hit me.
The way her upper lip contracted made me think she also had a sniff
at the gentle dog’s nether region.
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
Disclaimer:
Services and products advertised by external product suppliers in
this newsletter are paid for by the respective suppliers. Moonstone
does not endorse any opinions, conclusions, data, products, services
or other information contained in this e-mail which is unrelated to
the official business of Moonstone and furthermore accepts no
liability in respect of the unauthorised use of its e-mail facility
or the sending of e-mail communications for other than strictly
business purposes.
The complete disclaimer can be accessed
here.
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©2015 Moonstone. All rights reserved. |
