| (1) |
A binder agreement must, in addition to those matters provided for under section 49A(2)— |
| (a) |
specify if the binder holder is a non-mandated intermediary, an underwriting manager or an administrative FSP; |
| (b) |
specify the duration of the agreement; |
| (c) |
specify the level and standard of service that must be rendered to a policyholder, where relevant, and to the insurer; |
| (d) |
require that the binder holder at all times is fit and proper, and has appropriate governance, risk management, internal controls and information technology systems In place to render the services under the binder agreement; |
[Regulation 6.3(1)(d) substituted by regulation 7(t) of Notice No. 1437 of 2017]
| (e) |
require that the binder holder comply with applicable laws; |
| (f) |
specify the Rand value of the remuneration or consideration contemplated under Part 3C payable by the insurer to the binder holder or, if the Rand value is not fixed or determinable on entering into the agreement, the basis on which the remuneration or consideration payable will be calculated, in respect of each binder function performed under the binder agreement; |
[Regulation 6.3(1)(f) substituted by regulation 7(u) of Notice No. 1437 of 2017]
| (g) |
specify the disclosures that must be made and the information that must be provided to a policyholder, and the manner in which such disclosures or information must be made or provided when a binder holder— |
| (i) |
enters into, varies or renews a policy; |
| (ii) |
determines the wording of a policy; |
| (iii) |
determines premiums under a policy; |
| (iv) |
determines the value of policy benefits under a policy; or |
| (v) |
settles a claim under a policy; |
| (h) |
provide for the type and frequency of reporting by the binder holder on the services rendered under the binder agreement; |
| (i) |
provide for the manner in and the means by which an insurer will monitor the binder holder's performance under and compliance with the binder agreement; |
| (j) |
provide for periodic performance reviews of the binder holder and the regular review of the binder agreement; |
| (k) |
specify that the insurer has a right to access any data held by the binder holder as and when such data is requested by the insurer; |
[Regulation 6.3(1)(k) substituted by regulation 7(v) of Notice No. 1437 of 2017]
| (l) |
address confidentiality, privacy and the security of information of the insurer and policyholders; |
| (m) |
address ownership of intellectual property; |
| (n) |
specify that the binder holder must take the necessary steps to allow the Authority access to its business and information in respect of the functions performed under the agreement; |
| (o) |
include indemnity and liability provisions; |
| (p) |
require the binder holder to provide the insurer with access to up-to -date, accurate and complete data (in accordance with regulation 6.2A(2)) to ensure that the insurer is able to comply with any regulatory requirements relating to data management, including any requirements provided for in the Policyholder Protection Rules, at the following intervals— |
| (i) |
daily, in respect of policies other than funeral and assistance policies; |
| (ii) |
monthly, in respect of funeral and assistance policies; |
[Regulation 6.3(1)(p) substituted by regulation 7(w) of Notice No. 1437 of 2017]
| (q) |
set out any warranties or guarantees to be furnished and insurance to be secured by the binder holder in respect of its ability to fulfill its contractual obligations; |
| (qA) |
provide for mechanisms and measures that will assist the insurer in meeting procurement, enterprise and supplier development targets relating to the transformation in the insurance sector; |
[Regulation 6.3(1)(qA) inserted by regulation 8(d) of Notice No. 1015, GG 41942, dated 28 September 2018]
| (r) |
provide for a dispute resolution process; |
| (s) |
provide for a termination period, irrespective of the circumstances under which the agreement is terminated (including the lapsing or non-renewal of the agreement), of at least 90 days, that will allow— |
| (i) |
the binder holder and insurer to comply with any legislative requirements relating to the policies referred to in the binder agreement; and |
| (ii) |
for the transfer or sharing of all electronic and paper-based records in respect of the policies referred to in the binder agreement, including the names and identity numbers of all policyholders, insured persons and beneficiaries; and |
| (t) |
provide for business contingency processes, including the continuity of service if the binder holder is placed under curatorship, business rescue, becomes insolvent, is liquidated or is for any reason unable to continue to render the services in accordance with the binder agreement. |
| (2) |
Subregulation (1)(t) does not prohibit a binder agreement from providing that an insurer may— |
| (a) |
limit or prevent a binder holder from performing certain or all binder functions during the termination period; or |
| (b) |
take reasonable measures to limit any risks it may be exposed to resulting from or associated with a binder agreement or its termination. |
(3)
| (a) |
A binder agreement may only provide for matters referred to in section 49A of the Act, this Part and matters incidental thereto, and may not regulate any other arrangement or relationship with the binder holder, irrespective of such other arrangement or relationship being dependent on the conclusion of a binder agreement or that the binder agreement is in addition to or consequential to such other arrangement or relationship. |
| (b) |
A binder agreement may not prohibit an insurer from communicating directly with its policyholders or any independent intermediary. |
| (4) |
A binder agreement concluded with a non-mandated intermediary, in addition to the matters provided for under subregulation (1), must limit the discretion of the binder holder in respect of— |
| (a) |
the maximum value of policy benefits that may be determined under each policy or the maximum value of any claim that may be settled by the binder holder under the policies to which the binder agreement relates; |
| (b) |
the morbidity and mortality risk factors, where appropriate, that must be considered by the binder holder when entering into, varying or renewing a policy or determining the value of policy benefits under a policy; |
| (c) |
other parameters in accordance with which the binder holder must render the services provided for in the binder agreement; and |
| (d) |
any guarantee of policy benefits that may be provided for under an investment policy as defined in Part 3A of the Regulation. |
| (5) |
A binder agreement concluded with a non-mandated intermediary may not authorise the binder holder to— |
| (a) |
refuse to renew a policy; |
| (b) |
reject or refuse to pay a claim for policy benefits or a part thereof; |
| (c) |
terminate, repudiate or deny an insurer's liability to provide policy benefits under a policy; or |
| (d) |
declare a policy void. |
| (6) |
An insurer must promptly take reasonable steps to rectify any non-adherence to a binder agreement. |
[Regulation 6.3(6) inserted by regulation 7(x) of Notice No. 1437 of 2017]
| (7) |
An insurer must retain a copy of a binder agreement for a period of at least 5 years from the date on which a binder agreement is terminated. |
[Regulation 6.3(7) inserted by regulation 7(x) of Notice No. 1437 of 2017]
Statistics Act, 1999
