FSB fines Smart Life R150 000

The Registrar of Long-term Insurance (the Registrar) referred a case against The Smart Life Insurance Company Limited (Smart Life) to the Enforcement Committee of the Financial Services Board.

During the period 15 April 2013 until 24 June 2016 Smart Life contravened Rule 16.1 of the Policy Holder Protection Rules (Rules) issued under the Long-term Insurance Act, No.52 of 1998 by rejecting claims without advising policyholders in its notice of rejection of their rights as stipulated in Rule 16.1. In particular, Smart Life failed to inform its policyholders of:

  • Their right to make representations to the insurer regarding Smart Life’s decision to reject the claim within a period of not less than 90 days of receipt of the rejection notice.
  • Their right to lodge a complaint with the appropriate Ombud under the Financial Services Ombud Schemes Act of 2004.

As aggravating factors the Registrar considered, amongst other factors, that Smart Life failed to demonstrate sound insurance principles and practice in the interests of the policyholders and that its failure to comply with the Rules had the potential of causing prejudice to the policyholders whose claims were rejected.

In mitigation the Registrar took into account, amongst other factors, that Smart Life accepted responsibility for the contravention, co-operated with the Registrar’s investigation and the subsequent enforcement action, and undertook to implement measures to prevent similar contraventions from recurring.

Consequently, the Registrar agreed to a penalty of R150 000, which  was imposed by the Enforcement Committee on Smart Life on 14 June 2017.

, , ,

Comments are closed.
SA Corona Virus Online Portal Logo