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Moonstone Monitor - 8 February 2018 |
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Paul Kruger
Author/Editor |
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What you cannot enforce, do not command - Sophocles |
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Distributed to 50,020 subscribers.
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From the Crow's Nest |
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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:
- 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
- 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
- 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;
- 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;
- The Registrar failed to follow due process and her actions were one sided and
biased and lacked objectivity;
- 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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Your Practice Made Perfect |
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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.
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There is no charge for Moonstone Protector clients for either
option, but hey have to register via the
Moonstone
website. |
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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 |
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Register now.
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Check your Mate
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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:
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The conduct of AVBOB failed to demonstrate sound insurance principles
and practices in the interest of the policyholders.
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The intermediary rendered services to 69 clients in respect of the
savings product during the period in question.
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AVBOB was not aware of the licence changes of the intermediary until
it was brought to its attention by the FSB.
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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
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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
Moonstone Information Refinery
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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:
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Of South Africa’s total population of just over 57 million, 30 million has access to the internet, a growth of 7% from 2017
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Social Media users have increased by 20%
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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:
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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.
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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.
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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:
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.
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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 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
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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 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. |
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Featured Positions |
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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
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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
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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.
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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
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Insurance Field Sales
Reps:
Quantum Invest, Nationwide - We are looking for field Reps
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Read More
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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
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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 |
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Something dry from the Cape |
Cape Tourism gets clever
Pool party in die Kaap
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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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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