Co-administration agreements (also referred to as profit-sharing or 80/20 agreements) between insurers and funeral parlours or funeral administrators are under the magnifying glass of the FSB. This is very much in line with the current review of binder agreements and proposed changes to cell captive agreements, and will follow the same approach.
A draft Information letter was published last week, inviting industry comment before 11 October 2013. If you are affected, we strongly recommend that you download a copy and make sure that you understand what is proposed.
We believe the same process will be followed as with the Binder agreements, when a 25-page document was published to share the Regulators views on comments received.
We are considering running workshops to unpack the practical intent and implications of these proposals once the final document is published.
Comments on the draft Information Letter must please be submitted in electronic format to the Registrar of Long-term Insurance by 11 October 2013, c/o Martha.Ferreira@fsb.co.za.