Long Term Insurance Act, 1998 (Act No. 52 of 1998)

Rules

Policyholder Protection Rules (Long-term Insurance), 2017

Chapter 5 : Intermediation and Distribution

Rule 12 : Arrangements with Intermediaries and Other Persons

Purchase

12.1 Definitions

In this rule—

"FAIS product knowledge competency requirements"

means the requirements relating to class of business training and product specific training prescribed under the FAIS Act; and

"intermediary agreement"

means an agreement entered into between an insurer and an intermediary setting out the terms under which the intermediary will render services as intermediary in respect of the policies of the insurer, and in respect of a representative, includes policies entered into with an insurer as contemplated in paragraphs (b), (c) and (d) of the definition of "representative" in Part 3A of the Regulations.

[Definition substituted by rule 8(a) of Notice No. 997, GG 41928, dated 28 September 2018]

12.2	Intermediary agreements

12.2.1

An insurer may only enter into an intermediary agreement with an intermediary where—

(a)

in the case of an independent intermediary, that person has been licensed as a financial services provider and authorised to render financial services in respect of the policies offered by the insurer in accordance with section 8 of the FAIS Act, and the insurer has taken reasonable steps to satisfy itself that the independent intermediary and, where applicable, any persons rendering services as intermediary on the independent intermediary's behalf, meet the FAIS product knowledge competency requirements in respect of the policies offered by the insurer; or

(b)

in the case of a representative of that insurer, that person has been duly appointed as a representative of the insurer in accordance with section 7(1)(b) of the FAIS Act and meets any requirements to be fit and proper prescribed under the FAIS Act in respect of that representative and the policies offered by the insurer including but not limited to the FAIS product knowledge competency requirements.

12.2.2

An intermediary agreement must be entered into directly between the insurer and the intermediary concerned and may not be entered into by a third party acting on behalf of either the insurer or the intermediary.

12.2.3

An insurer must, where an intermediary agreement has been entered into, furnish the intermediary with a written copy of the intermediary agreement setting out the terms and conditions thereof.

12.2.4

Despite any provision of an intermediary agreement or any provision in law to the contrary, when—

(a)	a licence referred to in rule 12.2.1(a) becomes inoperative by virtue of the licence being suspended or withdrawn in terms of section 9 of the FAIS Act or lapsing in terms of section 11 of the FAIS Act; or

(b)	the appointment of the representative referred to in rule 12.2.1(b) is terminated,

an intermediary agreement terminates.

12.3	Requests for information

12.3.1

An insurer must at the written request of an intermediary that is authorised in writing by a policyholder or a member provide that intermediary or the policyholder or member with the information referred to in the authorisation, within a reasonable time after receipt of the request, irrespective of the fact that the intermediary does not have an intermediary agreement with that insurer.

12.3.2

Where the insurer provides the information referred to in rule 12.3.1 to the policyholder or member, the insurer must also provide the policyholder or member with a fair and objective explanation as to why the information was not provided to the intermediary.

12.3.3

An insurer must, at the written request of an intermediary with whom an intermediary agreement has been entered into, provide that intermediary, within a reasonable time after receipt of the request, with all information reasonably required by the intermediary to comply with any disclosure or other requirements binding on the intermediary by virtue of the FAIS Act or any other law.

12.4	Facilitation of fees payable by policyholder to an intermediary or any other person

12.4.1

An insurer may not facilitate the deduction or charging of any fee payable by a policyholder to an intermediary or any other person, unless the insurer has satisfied itself that the amount and purpose of the fee have been explicitly agreed to by the policyholder in writing, and that it appears from such agreement that the fee—

(a)	relates to an actual service provided to a policyholder;

(b)	relates to a service other than rendering services as intermediary; and

(c)	does not result in the intermediary or other person being remunerated for any service that is lso remunerated by the insurer.