Learn from compliance mistakes made by FSPs
An FSP’s interaction with clients must at all times meet the standards set out in the General Code of Conduct. The FAIS Ombud’s Annual report highlighted a few settlements that particularly challenged the adherence to two such standards.
The first settlement relates to Section 7 of the Code that stipulates that “a provider other than a direct marketer, must in particular, at the earliest reasonable opportunity, provide, where applicable, full and appropriate information of the following:
- concise details of any special terms or conditions, exclusions of liability, waiting periods, loadings, penalties, excesses, restrictions or circumstances in which benefits will not be provided”
In the case of T vs A the complainant had a vehicle insurance policy with the respondent from January 2016. On 21 September 2017, the complainant was involved in an accident whilst on his way to a business meeting and the car was written off. He lodged a claim, which was rejected on the basis that he had been using the car for business purposes. The respondent revised its initial decision after the Ombud’s office pointed out that the complainant had not been correctly advised of ‘business use’.
The second settlement highlights Section 3 (1) (d) of the Code that requires that the financial service be actioned in accordance with the reasonable requests and/or instructions of the client.
In the case of DG vs L, the complainant requested their broker to specify certain items on their policy. During June 2017, the complainants’ main house was consumed by the Knysna fires and he submitted a claim. However, the complainant was informed that the items had not been listed or specified on the policy and, as a result, they were under-insured. As there was sufficient documentation to support the policy update and as the respondent failed to action the request, there was overwhelming evidence to settle the matter in full with the complainant.
Click here to read more detail as published in the FAIS Ombud’s Annual Report.