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Category:
Insurance
News /
Life
Insurance /
Regulatory
Bodies
/ August 2006
Direct marketers must be authorized in terms of FAIS
“It must be remembered that Product Suppliers like 1Life Direct are not
subject to FAIS but subject to PPR for Long-term Insurance. As a
Compliance Officer I have had this discussion with Dr. Franso van
Zyl at the Financial Services Board and he reminded me of this fact.
Therefore we must be careful not to confuse advisers’ and
intermediaries’ (financial services providers as defined)
obligations under FAIS with product suppliers’ obligations under PPR.”
“Although
I would also prefer that all proposals regarding financial products
to consumers be subject to the same rules as governed under FAIS,
this is how the law stands currently.”
The
Policyholder Protection Rules (PPR) is subordinate legislation
issued in terms of both the Long Term and Short Term Insurance Acts
of 1998 and must be adhered to by all registered Long Term and Short
Term Insurance Companies, irrespective if those companies are
authorized Financial Services Providers (FSP’s) in terms of the
Financial Advisory and Intermediary Services Act, 2002 (the FAIS
Act) or not.
IN
ADDITION (my emphasis) where those companies employ their own sales
forces and their employees interact directly with clients or
potential clients, they are required to be authorized as FSP’s and
comply with the requirements of the FAIS Act and the General Code of
Conduct issued in terms of the FAIS Act as these individual
employees provide advice and this aspect is not regulated in terms
of the PPR.
For
this reason the provisions of the PPR and the General Code of
Conduct dovetail with one another on a number of issues (these are
identical).
I
have stated previously that it is our view that Direct Marketers
inevitably provide advice to clients, and for this reason they must
also be authorized FSP’s in terms of FAIS.
For
this reason 1Life Direct has now been authorized as a FSP.
I
trust that this clarifies the issues raised.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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