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Moonstone Monitor - 14 September 2017 |
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Paul Kruger
Author/Editor |
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Never suffer youth to be an excuse for inadequacy, nor age and fame to be an
excuse for indolence – Benjamin Haydon |
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Distributed to 48,939 subscribers.
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From the Crow's Nest |
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Appeal Board upholds Ombud Decision |
In June we reported on three new cases to be heard by the FSB Appeal
Board. One of these concerned a complaint that was dismissed by the Ombud but
the client, an advocate, appealed to the Board against the Ombud’s finding.
Background
The claim was rejected because the vehicle, which was written off in an
accident, was not roadworthy. The tyres were worn and this was “material to the
cause of the loss”.
The complainant was aggrieved as it appears that the underwriting manager, MUA
Insurance Acceptances, changed the insurer from Compass to Auto and General
without informing him. He was adamant that, if he had been informed of the
change of insurer, he would not have agreed to contract with Auto and General
and would have chosen a different insurer to undertake the risk.
The respondents pointed out that, although the insurer was changed, the terms
and conditions of complainant’s contract remained the same.
The Ombud ruled that no other insurer would have paid the claim, given the fact
that the vehicle was not roadworthy.
Grounds for Appeal
The client contended, amongst other arguments, that his contract with MUA did
not make provision for the policy to be ceded or transferred to a third party
without his consent and knowledge. In fact, in terms of Clause 2 of the
contract, both MUA and the broker were obliged to inform him of any changes to
the contract.
He further indicated that the failure to inform him of the change of insurer
prevented him from exercising his right to choose his own insurer. These
failures rendered his policy contract null and void, which meant that the FAIS
Ombud “…erred by considering and adjudicating further on any aspects of the void
insurance contract.”
In terms of these and other breaches of the contract, the Ombud should not have
dismissed the complaint.
Respondents’ case
The applicable terms and conditions under the new policy were identical to those
of the original policy, and MUA, with whom the client was familiar, continued to
administer the policy. They, too, repudiated the claim in terms of their
mandated binder agreement, the terms and conditions of which were identical to
what the client was familiar with.
Appeal Board Finding
The Board was quite scathing in its view on the industry’s disregard for a
client’s rights:
“In our view, the practice in the industry which seems to derive from an
interpretation of Rule 7.3 of the PPR, permitting for unilateral decision-making
with regard to the terms, including changes made regarding the parties to this
policy contract without as much as informing Mr. Phoshera, cannot stand. As
already mentioned, it is out of sync with other applicable legislation. It is
particularly untenable in a legal dispensation such as ours where a supreme
constitution in its Bill of Rights and Responsibilities guarantees and protects
fundamental human rights and freedoms which include the right to freedom of
association, the right of access to information and the right to be treated with
human dignity.”
“That indeed suggests more than just the need for knowledge of the change of
insurer and or underwriter. Bhekukwenza Hlela strengthens the notion that when
a new binder agreement is entered into it is critical that the insured be
appropriately notified so as to grant her/him the opportunity to exercise the
choice to stay, alter and or opt out of the policy contract.”
“Indeed, that right to choose in the context of the conclusion of a policy
contract amounts to consent in line with Section 106 (4) of the National Credit
Insurance Act of 2005 and Section 48A of the STI Act read with the General Code
of the Financial Services Providers.”
As the
terms and conditions of the original policy contract remained identical
to those in the new policy which was based the MUA/Auto & General binder
agreement, and as the same administrator considered the claim as would have been
the case under the original policy, the appeal was not upheld.
Ramifications of the failure by the brokerage concerned to notify the insured of
the change of insurer will be discussed next week.
Please
click here to download the relevant Judgment. |
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11-15 September is National Wills Week
The latest figures released by the Master of the High Court reveal that
more than 70% of the South African working population do not have
wills.
This ‘Wills Week’ 11-15 September, GTC’s Fiduciary Services team
invites you to consider setting up a formal partnership with us in order
to offer your clients contemporary and tax-savvy advice in drawing up
their wills and estate plans, to ensure that their testamentary wishes
are carried out and that their fiduciary responsibilities are honoured.
Through a working relationship with GTC Fiduciary Services, you can
assist your clients with the drafting of wills, estate administration,
setting up of trusts, trust administration and taking on professional
trusteeships, along with dedicated estate planning solutions.
For a one-on-one meeting to discuss a partnership with us, please
contact Jeremy Woods: jwoods@gtc.co.za.
t. +27 (0) 10 597 6858
e. info@gtc.co.za
w.
www.gtc.co.za
An authorised Financial Services Provider FSP no. 731. |
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Your Practice Made Perfect |
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POPI Information Officer Obligations |
The Protection of Personal Information Act adds yet another obligation
on businesses in the financial services sector.
Draft regulations, published on 8 September 2017, set out what will be
required. Section 4 outlines the duties and responsibilities of
information officers which companies will be obliged to appoint.
Subject to the provisions of section 55 of the Act, an information
officer must ensure that -
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a compliance framework is developed, implemented and
monitored; |
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adequate measures and standards exists in order to
comply with the conditions for the lawful processing of
personal information; |
c) |
preliminary assessments are conducted; |
d) |
a manual for the purpose of the Promotion of Access to
Information Act and the Act is developed detailing—
(i) the purpose of the processing;
(ii) a description of the categories of data subjects and of the
information or categories of information relating thereto;
(iii) the recipients or categories of recipients to whom the personal
information may be supplied;
(iv) the planned trans-border or cross border flows of personal
information; and |
e) |
a general description allowing preliminary assessment of
the suitability of information security measures to be
implemented and monitored by the responsible party;
(e) the manual referred to in paragraph (d)
is available -
(i) on the website, of the responsible party; and
(ii) at the office or offices of the responsible party for public
inspection during normal business hours of that responsible party; |
f) |
internal measures are developed together with adequate
systems to process requests for information or access
thereto; and |
g) |
awareness sessions are conducted regarding the
provisions of the Act, regulations made in terms of the
Act, codes of conduct, or information obtained from the
Regulator. |
Expectations are that Popia will become effective early in 2018, so you
may want to consider getting the ball rolling in respect of the above.
Click here to download the latest draft regulations. |
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Exemption for Compliance Officers
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FAIS Notice 119, published on 13 September 2017, contains details of
changes to the minimum prescribed intervals of visits and reports by
compliance officers as contained in Section 4(4) of the Notice on
Compliance Officers. These changes are as a result of feedback from the
industry in response to an invitation by the Regulator.
In essence, the exemption places the onus for determining the number of
branch visits and reports on the compliance officer, who has to have due
regard for a FSP’s specific circumstances which include:
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the nature, scale and complexity of the provider's business and
nature and range of financial services, activities and ancillary
services offered;
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compliance risks of the provider having regard to the financial
services, activities and ancillary services offered, as well as the
types of financial products in respect of which the services are
rendered and the market in which it operates;
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availability and adequacy of off-site monitoring tools; and
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off-site access to data from the business premises, business units
and/or branches of the provider;
The CO is also obliged to establish and implement a monitoring programme
that takes into consideration all areas of the provider's financial
services, activities and any relevant ancillary services to ensure that
compliance risks and changes to those risks are comprehensively
monitored;
The CO should also review the monitoring programme on a regular basis,
as well as ad-hoc when necessary, to ensure that emerging risks are
taken into consideration and, on a regular basis, report to the provider
on at least the following:
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adequacy and effectiveness of the overall control environment for
financial services and activities, including systems, policies, controls
and procedures;
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the risks and deficiencies that have been identified; and
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the remedies undertaken or to be undertaken.
Finally, the CO must inform the provider to whom the compliance officer
renders compliance services of the applicability of this exemption to
such services.
You may also want to consider making use of Suitebox, a piece of
technology which can save you aeons of time in both travel and record
keeping. Click here for a 1.5 minute introduction.
Please
click here to download FAIS Notice 119 of 2017. |
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FIC Head Departing
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Legalbrief Today reports:
The head of the Financial Intelligence Centre (FIC), Murray Michell,
will leave at the end of 2017 and the Treasury is seeking a replacement
for him. A Business Day report says the contract of Michell – who has
been at the helm of the body since it was established about 14 years ago
– is coming to an end. It is understood that he is retiring. The
Treasury advertised the position at the weekend, giving only two weeks
before the deadline for applications, which may suggest that a
replacement has been identified.
The real danger would be if the security cluster of agencies moved in to
take over the institution at a critical time when it will be
implementing higher scrutiny of prominent influential persons under the
recent amendments to the FIC Act. The agencies expressed their
dissatisfaction with the FIC operating outside of their systems during
parliamentary hearings on the amendments earlier in 2017. The report
notes Michell’s imminent departure adds to a number of highly placed
officials who have left the Treasury since Finance Minister Malusi
Gigaba took office.
Full Business Day report. |
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Technologically Speaking
Moonstone Information Refinery |
The future of financial advice in SA |
The SuiteBox client engagement and support tool delivers video
meeting and digital signing capabilities to financial advisers.
Rapid advances in fintech provide a host of solutions that
streamline the delivery of financial advice, while driving customer
engagement, enhancing productivity, minimising costs and ensuring
workflow-embedded risk management and compliance.
Among the most exciting of these fintech solutions is
SuiteBox.
SuiteBox allows advisers and their clients to meet and discuss
financial solutions, whether document or web based, virtually, as if
in the same room. Contracts and agreements can further be signed
online with digital identity certification adding a layer of
validity to the transaction process.
"Not only can technology like
SuiteBox
improve and enhance client/adviser interaction, engagement and
capacity, it does so with adherence to the highest standards of
compliance, record keeping and cost effectiveness. Importantly, it
will free up the adviser to focus on delivering a quality advice
experience to his or her clients,” adds Hjalmar Bekker, Director of
Moonstone Information Refinery, SuiteBox distributor for Africa.
Click here to read more.
Suitebox Media contact
Neil Summers, Sales Manager, Moonstone Business Services
Mobile: +27729088994
Email:
neil@suitebox.com
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Regulatory Examinations
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Frequently Asked Regulatory Exam
Questions |
1. |
What exam must I write?
Both the RE 5 and RE are Level One exams. RE 5 is for Representatives and
RE1 for Key Individuals. The RE 3 exam is for licence category II
candidates.
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2. |
How much does it cost?
The FSB determines the fee. Currently it costs R1163 per exam, also in
the case of a re-write.
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3. |
What preparation material is available?
Fully updated resources are available for those requiring access to the
legislation applicable to the regulatory examinations:
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Please make sure that you first read the
FSB’s Preparation Guide to
make sure you follow the right process in preparing. Page seven includes
a recent amendment to guide candidates in studying in the correct
manner. |
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Click on the following highlighted sections to download the relevant
updated Inseta learning material for key individuals,
RE 1, and
representatives,
RE 5. |
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LexisNexis provides a “Legislation Handbook” together with a
“Preparation Guide” containing the qualifying criteria, with a link to
the relevant legislation. |
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The
Juta FAIS Pocket Statutes also contains a CD with a comprehensive
list of updated supplementary legislative material for reference
purposes. Please click here to order this from our online shop. |
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The FSB’s telematics broadcast on the RE 1 and RE 5
provides a good introduction and overview, and can also be ordered
online in: |
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DVD format or on a
USB memory stick
MP4 download (Only if you have a fast internet connection) |
4. |
Where can I write?
Go to:
http://www.faisexam.co.za/show_venues |
5. |
What dates are available?
Go to:
http://www.faisexam.co.za/view_schedule |
6. |
What training is available?
As an Exam body we are not allowed to recommend companies that offer
face-to-face Regulatory exam classes. You can try Google for someone in
your area.
Bear in mind that this exam tests your knowledge about the laws
applicable to the provision of financial advice and intermediary
services. The questions are based on very specific qualifying criteria
set out in the FSB preparation guide. Any training that does not have
this as a basis will not prepare you properly for the exam. Do your own
research and don’t just accept what others say. |
7. |
Where can I buy old question papers?
There are no genuine “old question papers” available. Be very careful
when buying such preparation aids as some of those on offer are not in
line with the high standard prevailing in the actual exams and often
lead to a false sense of knowledge which is sadly exposed when
confronted by the actual exam. Follow the guidelines provided in the FSB
Preparation Guide and you are far more likely to achieve success. |
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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 48000
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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Marketing & Events
Coordinator:
Sovereign Group, Cape Town - The applicant must be a fluent and
articulate English and Afrikaans speaker holding an undergraduate degree
obtained from a reputable tertiary institution. Applicants with a
marketing background will receive preference.
Read More
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Legal/Administration
Assistant Position (Half Day):
Sovereign Group, Cape Town - The successful applicant will assist
two to three lawyers in the office, must have a relevant degree and be
fluent and articulate in English and Afrikaans.
Read More
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Financial Advisor:
Origin Financial, Cape Town - The core function of the successful
candidate is to look for new business and maintain relationships with
clients. Must have own car & driver’s licence as well as RE certificate.
Read More
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Financial Advisors:
Quantum Invest (Pty) Ltd, Randburg Ridge, Johannesburg - If you have
a Matric and RE5 Certificate with 8 months experience in the Insurance
Industry, then
Read More
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Short Term Commercial
and Domestic Sales Consultant:
Wealth Solutions Capital Insurance Brokers, Bedfordview - We are
looking for dynamic and energetic go getters for short term commercial
and personal lines insurance, as well as for Financial Advisers.
Read More
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In Lighter Wyn |
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If you don’t know the answer, just wing it |
Thanks, Roche Cowley.
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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
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The complete disclaimer can be accessed
here.
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