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Moonstone Monitor -  8 February 2018
In This Week's Newsletter
 
From the Crow's Nest
Unsuccessful Appeal Against Debarment – “…clients chose to forge their own signatures...”
 
Your Practice Made Perfect
2017 Moonstone Compliance Report Workshop – Registration closes tomorrow for one person businesses
Check your Mate – Insurer fined R100 000 for omitting to perform basic PPR requirement
Climate Change and Insurance – Can clients claim for drought-related issues?
 
Technologically Speaking
Are you Digitally Linked In? – Your 2018 planning needs to include basic digital client interaction
 
Regulatory Examinations
Regulatory Exam Study Material
Schedules for 2018
Frequently Asked Questions
 
Careers Platform
Are you hiring? Advertise your position on Moonstone’s Career Platform
Featured Positions
 
In Lighter Wyn
Something dry from the Cape
Paul Kruger 2017-08-03
Paul Kruger Author/Editor
 
 
 
 

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What you cannot enforce, do not command - Sophocles
 
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From the Crow's Nest
From the Crow's Nest
Unsuccessful Appeal Against Debarment
Cases heard by the Appeal Board of the FSB often provide more stringent legal certainty to matters in the financial services industry, particularly in so far as decisions by the FSB itself and the FAIS Ombud are concerned.

We commented before on some cases where the grounds for appeal border on the absurd, seasoned by a strong helping of arrogance. The latest case sets new standards in this regard.

The Registrar’s decision

On 28 April 2017, the FSB debarred the appellant from rendering financial services for a period of five years, based on the following grounds:
  1. The appellant no longer met the requirements contemplated in section 8 of the FAIS Act with reference to character qualities of honesty and integrity; and
  2. contravened sections 2 and 3(1)(d) of the General Code of Conduct
This stemmed from the fact that the appellant submitted fictitious and/or fraudulent Discovery HIV and Pathology Screening Request Forms for purposes of undergoing blood tests in respect of policy applications for his clients. These forms were found to be fictitious and/or fraudulent in that the appellant's clients' signatures appearing thereon were forged.

The appellant colluded with an employee and former employee of Lancet to identify other patients with favourable blood screening results and to swop the appellant's clients' blood samples with extra samples of these other patients.

The appellant's case
  1. The Registrar could not rely on the handwriting examination reports of Discovery's expert (Mr Van Vuuren) to substantiate the appellant's disbarment as van Vuuren's expertise was not established;
  2. No reliance could be placed on the evidence of the two Lancet's employees implicating the appellant due to their contradictory evidence. According to the appellant, it could well have been that they ran a scam on their own;
  3. The Registrar failed to follow due process and her actions were one sided and biased and lacked objectivity;
  4. Lastly, should the Appeal Board find that the Registrar was justified to debar the appellant, the debarment period was too harsh.
The Appeal Board findings

“The appellant was in the course of the protracted investigation confronted with many allegations, confirmed by affidavits, concerning his misconduct. The appellant chose, through his former attorneys of record, to avoid the issues, attack the messenger and the character of the some of the witnesses and to raise contrived procedural issues. The obvious stratagem was to delay the day of reckoning. What is glaringly absent is the appellant's version of the facts.” (This reminds me of someone else who shall remain nameless – editor)

“This immediately puts to rest the third point, which was that the Registrar should have allowed the appellant to cross-examine the witnesses. There were no bona fide factual disputes.”

“There is, however, one exception and that relates to the first point, the expertise of van Vuuren. The point can be dismissed on a very simple ground. It is common cause that the signatures of all the witnesses, who had been clients of the appellant, in relation to their blood tests were forged. They not only said so, but so did the expert who examined their signatures on behalf of the appellant.”

“The only dispute between the handwriting witnesses was whether it could be established that the appellant himself had forged the signatures. The Registrar, in her reasons, chose to accept the appellant's expert evidence and not that of van Vuuren. In other words, the expertise of van Vuuren is irrelevant.”

“Nevertheless, that does not affect the general conclusion that the appellant caused the signatures to be forged. He was the only person to benefit from the forgery. On his argument, his clients chose to forge their own signatures — a ridiculous contention, which also puts to rest the second point. The Registrar was very conscious of the fact that she was dealing with accessories to the fraud and approached the evidence with the necessary suspicion but found more than enough objective corroboration for their version.”

“It was not and could not be argued that the Registrar misdirected herself or failed to exercise her discretion properly. In the light of the elaborate and massive scale of the fraud, a much longer period could have been justified.”

The appeal was dismissed with costs, which are to be taxed in terms of the Uniform Rules of Court.

Given the Appeal Board’s view on “…of the elaborate and massive scale of the fraud…”, one has to wonder whether the matter ends here, or whether criminal charges are to be/have been laid against the appellant.

Click here to download the full judgement by the Appeal Board.
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What if you could focus on doing what you love - looking after your clients?

Leading Independent Financial Advisory (IFA) practices are using GTC’s Strategic Partner solution to:

   - increase time with clients
   - increase earnings
   - reduce costs

Shouldn’t you too?

Our staff and systems deliver exceptional service, increasing revenues and saving costs and time for you, enabling you to build value for succession.

With offices nationally, we are well-placed to help you.

Call us to discuss a strategic partnership.

t. +27 (0) 10 597 6831
e. info@gtc.co.za
w. www.gtc.co.za

An authorised Financial Services Provider FSP no. 731
Your Practice Made Perfect
Your Practice
2017 Moonstone Compliance Report Workshop

Register here

Moonstone’s annual workshops for Cat I FSPs without a Compliance Officer will be held on the dates indicated below. The 2017 Compliance Report must be submitted prior to 28 February 2018.

Those wishing to submit it electronically are welcome to do so, provided they have their own internet access.

A very important item on the agenda is a discussion on the new Fit & Proper requirements such as Class of Business Training, Product Specific Training, Continuous Professional Development as well as the new Operational Ability aspects. This information is of critical importance for your business from 1 April 2018.

Should you wish to claim CPD points, Moonstone will issue a certificate of attendance on request.
 
There is no charge for Moonstone Protector clients for either option, but hey have to register via the Moonstone website.
Cost to non-Protector clients is R750 (excl. VAT) for the face-to-face workshops and R450 (excl. VAT) for the live webinar session.

Workshops will be hosted in the morning (09H30) at the following venues:

Durban Thursday
15 February
(Westville: Pharos House -
Moonstone Exam Centre)
Cape Town Tuesday
20 February
(Pinelands: Pinewood Park -
Moonstone Exam Centre)
Johannesburg Wednesday
21 February
(Sandton: Sinosteel Plaza -
Moonstone Exam Centre)
Live Webinar Thursday
22 February
 


Register now.

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Check your Mate
In a recent matter between the Registrar of Long-term insurance and AVBOB (the respondent) it was agreed that AVBOB will pay a penalty of R100 000 for contravening the Policy Holder Protection Rules (Long-term Insurance), 2004.

Rule 5.1 states that “an insurer must, where an agreement has been entered into with an intermediary in connection with the insurance products of that insure, furnish the intermediary with a written copy setting out the terms and conditions thereof, provided that an insurer may on or after the commencement date only enter into such an agreement if the intermediary has, where lawfully required been issued with a licence for the rendering of intermediary services in terms of section 8 of the FAIS Act, or is, where lawfully required, a representative as contemplated in that Act of any such licensee.”

How did the respondent contravene rule 5.1?

AVBOB entered into an intermediary agreement with an intermediary in October 2010 to render services in respects of a savings product that AVBOB offered.

However, on 10 December 2014, the authorisation to render services as an intermediary in respect of certain financial products, including savings products, was withdrawn by the FSB. The intermediary nonetheless continued to render these services for and on behalf of AVBOB until April 2016.

Mitigating factors

The mitigating factors included that AVBOB accepted responsibility for the contravention, cooperated with the FSB and Registrar of Long-term insurance and undertook to implement measures to prevent future breaches of the PPRs occurring.

Aggravating factors

The following aggravating factors were relevant in this matter:

  • The conduct of AVBOB failed to demonstrate sound insurance principles and practices in the interest of the policyholders.

  • The intermediary rendered services to 69 clients in respect of the savings product during the period in question.

  • AVBOB was not aware of the licence changes of the intermediary until it was brought to its attention by the FSB.

  • The contravention continued for a considerable period from December 2014 to April 2016.

The FSB regularly publishes details of licence changes, including suspensions, cancellations and lifting of such restrictions. It is imperative that these records be scrutinised on a regular basis. Routine checks on the FSB website should also form part of an FSP’s duties
.
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Climate Change and Insurance
FAnews recently published an interesting article on the impact of the terrible drought in large parts of the country, and the possible effect thereof on the insurance industry.

"The effect of the drought will clearly have forced many businesses to begin thinking differently. Regardless of insurance, the effects of the drought could be felt long term. Both individuals and businesses will need to look to adapt to what is becoming a new norm. We need to explore new technologies and gain better understanding of best practices to assist us in adapting to changing environments," commented Gary Ferguson, Technical Claims Resolution Division, Aon South Africa.

Marike van Niekerk, Legal and Compliance Manager at MUA Insurance Acceptances says, "We have not seen much change in policy conditions due to climate change. We might see changes affected as severe weather conditions increase. We have not witnessed an increase in claims as a result of the drought yet. However, we do expect to see claims for drought-related issues in the near future (for example, damage to swimming pools caused by lower water levels)."

Click here to read the full article on the FAnews website.
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Technologically Speaking
Suitebox 2017-06-29
Moonstone Information Refinery
 
Are you Digitally Linked In?
by Janine Geldenhuys
It’s the start of 2018 and you have done your annual planning. Does this include the implementation of a digital channel as part of your marketing and client interaction?

Here are a few reasons why you should:
  • Of South Africa’s total population of just over 57 million, 30 million has access to the internet, a growth of 7% from 2017

  • Social Media users have increased by 20%

  • South Africa’s 3 most popular social media networks are Whatsapp, Facebook and YouTube.

[Source: Hootsuite]

The digital channel is something you can no longer ignore.

A good starting point in the digital space is to start with your online profile. Years back, the first impression was made in person but in today’s world people search your name in cyberspace. It is therefore important to make sure that when they find you, see your picture and read your profile that they feel they can trust you. Remember: first impressions last.

Let’s start with LinkedIn. Here are a few quick tips:
  1. Make sure you have a picture. The addition of a professional photo is the simplest way to improve your profile. Upload a business appropriate, head to shoulders photo – this will definitely personalise your profile.

  2. The next important part of your profile is what LinkedIn calls the “headline.” This is where most people simply put in their title. Don’t just add your job title. LinkedIn gives you 120 characters to use in this space. Add what you do, your target market, and how you can help them.

  3. Remember to personalise your LinkedIn address. When you register as a LinkedIn user it generates a system address. LinkedIn however allows the user to change the address. Make it more personal, change it to just your name or your name and title:
    LinkedIn personalisation

Did I mention that it’s free? You have nothing to lose but a few minutes, do you?

Next week we look at how you can use Facebook for more than just idle chatter.

Janine Geldenhuys is a communication officer at Moonstone Information Refinery.

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Regulatory Examinations
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Changes to Regulatory Exam Questions
The amended requirements contained in the 2017 Determination of Fit and Proper Requirements will have a substantial impact on the content of the study material for the REs.

There is uncertainty whether amended study material will be available on 1 April 2018.

Candidates who are currently preparing to write the exams should consider the possible implications of such changes, and endeavour to write the exams before it becomes effective.

We believe that the FSB is in the process of providing guidance on the deadline by when the amended requirements are to be incorporated in the regulatory exam questions. At this stage, we have to work on 1 April 2018, as this is the day the Determination comes into effect.

Candidates are advised to carefully consider the above and to only write the REs once they are absolutely ready.

Click here to read the full section on REs in the F & P Determination.
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2018 RE Schedules updated

Please note
: Registration cut-off is 11 working days before date of exam.
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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.
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.
3. What preparation material is available?
Fully updated resources are available for those requiring access to the legislation applicable to the regulatory examinations:
  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.
  Click on the following highlighted sections to download the relevant updated Inseta learning material for key individuals, RE 1, and representatives, RE 5.
  LexisNexis provides a “Legislation Handbook” together with a “Preparation Guide” containing the qualifying criteria, with a link to the relevant legislation.
  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.
  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:
    DVD format or on a
USB memory stick
MP4 direct download - 2 Gb
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
Are you hiring? Advertise your position on Moonstone’s Career Platform
Careers Platform Packages

•   The Moonstone website - www.moonstone.co.za - enjoys an average of 20 000 visits and approximately 39 000 page views per month.
Moonstone boasts an exclusive newsletter mailing list of over 49000 dedicated financial decision makers who receive 2 newsletters per week.
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.


Advertise


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Featured Positions
  • Client Service Administrator: Southwood Financial Planning, Tokai, Western Cape - An FPI approved, professional practice, based in Tokai, is looking for a client service administrator. Read More

  • Experienced Short Term Underwriter: The Insurance Center, Westville, KZN - Vacancy for an experienced short term commercial and domestic underwriter. Read More

  • Jnr Compliance Administrator: Saxo Capital Markets (Pty) Ltd, Sandton - Seeking Jnr Compliance Administrator to assist internal Head of Legal & Compliance in conjunction with external Compliance Officer. Read More

  • Compliance Research & Developer: Moonstone Compliance, Stellenbosch - The successful applicant will work closely with the R&D Manager and will be registered as a compliance officer under supervision with the FSB. Read More

  • Senior Regulatory Compliance Manager: Clientèle Limited Group, Johannesburg - The successful incumbent will be responsible for proactively and constructively assisting the Clientèle Group in managing its responsibility to comply with all relevant regulatory requirements and minimise compliance risks. Read More

  • Commercial Underwriter: HIC Underwriting Managers, Bedfordview - Join our dynamic team if you are Fais compliant with 120 credits and 5 years of experience. Read More

  • Insurance Field Sales Reps: Quantum Invest, Nationwide - We are looking for field Reps nationwide. RE5 qualification is recommended. We offer a competitive commission structure. Read More

  • Financial Advisor: Kaizen Solutions, Gauteng - We are currently recruiting an unlimited number of individuals aged 25 to 35 who are sales driven, motivated, ethical and dedicated. Read More

  • Senior Credit Controller: CIA Building Insurance, Bedfordview, is currently looking for an experienced credit controller to join our finance team. Read More

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In Lighter Wyn
In Lighter Wyn
Something dry from the Cape

Cape Tourism gets clever

Cape Tourism gets clever

 

Pool party in die Kaap

WC pool party



Here's an interesting take on astrology:

During his routine medical check, the long suffering patient asked the doctor, "Do you think I'll live a long and healthy life?"

"I doubt it", said the doctor, "Mercury is in Uranus right now."

The patient said, " I don't go in for any of that astrology nonsense."

"Neither do I", replied the doctor, "My thermometer just broke in your backside."
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