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)|