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Add-on insurance policies sold – FSCA requests information from insurers

To assist the Financial Sector Conduct Authority (FSCA) in obtaining better insights into the current processes and practices used to market and sell add-on insurance policies at motor dealerships to customers, the FSCA has requested all licensed insurers to submit specific information via the regulator’s portal.

What is an add-on policy?

According to the FSCA, an add-on insurance policy means “a life insurance policy or non-life insurance policy forming part of a specific product line that are sold alongside or as an add-on to the sale of a motor vehicle.“ “Product line” in this context means life insurance policies or non-life insurance policies, respectively, that have the same or closely related contractual terms.

The reason for the request

The FSCA has initiated a project focusing on the sale of these policies as there has been an increasing concern that consumers are potentially experiencing poor outcomes emanating from the sale of add-on insurance policies at point of sale through motor dealerships or as part of vehicle financing arrangements. “This Information Request therefore focuses on add-on insurance policies sold to customers when they purchase a new or used vehicle, which policy is meant to cover risks relating to the vehicle or to the financing of the vehicle.”

Type and format of information requested

All licensed insurers need to upload the declaration via the Conduct of Business Data Upload Facility on the FSCA website, regardless of whether they offer add-on insurance policies or not.
Information for all add-on insurance policies sold during the period 1 January 2017 – 31 December 2019 (inclusive) need to be provided.
The instructions for submission are set out in Annexure B.
All relevant insurers must submit the information by no later than 30 November 2020.
Failure to comply to the FSCA’s request is liable, on conviction, to a fine.

Click on the links to download all the relevant communication:

FSCA Information Request 4 of 2020 (INS)
Declaration Form (Annexure A)
Instructions and Terminology (Annexure B)

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