Should the FSB’s application be upheld, and this order is granted and made final, it will effectively mean that that any policyholder with a current claim will become a concurrent creditor of the insolvent estate and in all likelihood suffer a major loss.
At this point its impossible to say what dividend if any is likely but experience has taught that it will be minimal and the losses significant.
We don’t foresee claims against brokers who advised on Saxum as we believe it would have been impossible for the brokers to know, but then, with the aid of the almighty cure-all section 2 “due care and diligence” sword, nothing is impossible.
Any insurance broker should by now reasonably have become aware of the issues at Saxum and should be contacting policyholders and recommending alternatives. A broker who does nothing and allows a client to suffer damages in this fashion may be seen to be negligent and be held responsible for such losses.
As SaXum is insolvent, it is no longer able to pay policyholder claims or repay collateral amounts. SaXum’s unpaid claims and collateral will be considered by the liquidator as part of the liquidation process, should the application be granted. Policyholder queries can be directed to:
Ms Farzana Badat, Head: Insurance Compliance Department.
T: 012 428 8121