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Saxum Insurance referred to Enforcement Committee

Saxum Insurance referred to Enforcement Committee
06-08-14 / Staff Writer

Saxum Insurance referred to Enforcement Committee

Pretoria - The Financial Services Board's (FSB) has announced that its Registrar of Short-term Insurance ("the Registrar") has referred a matter against Saxum Insurance Limited ("Saxum Insurance") to its Enforcement Committee.

The referral relates to contraventions of the following legislation:
Section 45 of the Short-term Insurance Act, 1998 ("STI Act"), read with Regulation 4.1(1) and 4.3(3), respectively, of the Regulations under STI Act; and
Rule 7.4 (c) (iv) read with subsections (g) and (h) of the Policyholder Protection Rules.

In a statement issued on Wednesday, the regulator said evidence established inter alia that during the period from October 2012 to February 2013, Saxum Insurance failed to authorize a Financial Services Provider ("FSP"), in writing, to collect premiums on its behalf. Despite the lack of written authority, Saxum Insurance permitted the FSP to collect premiums and accepted the premiums in its bank account.

It said Saxum Insurance also authorised more than one person to receive premiums in relation to the same short-term personal line policies.

As a mitigating circumstance, the Registrar considered that Saxum Insurance accepted responsibility for the contraventions, has put measures in place to rectify the majority of the contraventions and fully cooperated with the Registrar during the enforcement process, it said.

Consequently, the Registrar agreed to a penalty of R75,000.00, which penalty was imposed by the Enforcement Committee on 31stJuly 2014. The Enforcement Committee is an administrative body that came into operation on 1stNovember 2008, and was created in terms of section 10(3) of the Financial Services Board Act, 1990. The Enforcement Committee may impose administrative penalties, compensation orders and cost orders on respondents that are found to have contravened any law administered by the Financial Services Board.

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