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Insurer Obligations re Credit Reports

In future, insurers will have to submit credit information in order to continue accessing consumer credit reports from credit bureaux.

On 3 November 2017, the National Credit Regulator (NCR) published its final guideline for the submission of credit information in terms of regulation 19(13) of the National Credit Act, 34 of 2005 (NCA) as amended (NCR Guideline) in the Government Gazette. This regulation requires credit providers to submit its credit information to the registered credit bureaux in the manner and form as prescribed by the NCR.

The NCR Guideline defines the concept of a data provider that may provide credit information to the credit bureaux as follows:

  • Any person who supplies goods, services or utilities to consumers, whether for cash or on credit (which includes cell phone service providers, rental housing agents and any other person that does not per se grant credit, but requires access to a consumer’s credit profile at the credit bureaux);
  • A person providing long term and short term insurance;
  • Educational institutions;
  • Debt collectors to whom book debt was ceded or sold by a credit provider.

The NCR Guideline requires that all data providers that access the payment profile information of a consumer for a permitted or prescribed purpose, must provide all relevant credit information in respect of consumers to the credit bureaux in the same manner and form as credit providers in order to receive payment profile information from the credit bureaux. Payment is defined to include payment history and financial information relating to a debt or credit transaction, together with payment dates, both negative (or adverse) and positive information and/or signs of depicting action taken in respect of a debt or credit transaction. Failure to submit the relevant credit information will result in the credit bureaux denying the data provider access to the payment profile information of consumers.

This is specifically applicable to insurers conducting credit checks on a consumer before entering into an insurance agreement with that consumer. These insurers are now required to submit the relevant credit information (insurance premiums payment information) to the credit bureaux in order to continue accessing consumer credit information from the credit bureaux.

The NCR entered into a memorandum of agreement with the South African Credit and Risk Reporting Association (SACRRA), in which the NCR endorsed the SACRRA data format layout and manner in which the credit information should be submitted to the credit bureaux by utilising SACRRA’s data transmission hub.

Annexure A of the NCR Guideline contains the format in which the data must be submitted to the data transmission hub. SACRRA also issued a guideline (SACRRA Guideline) to further assist credit and data providers with their data submission obligations. Both these guidelines require non-SACRRA members to undergo an assessment to determine the category in which the credit or data provider will be allocated for the purpose of development, testing and implementation. The once-off assessment fee is R500. You should ensure that you contact SACRRA as soon as possible to commence with the assessment, as the assessment deadline stated in the NCR guidelines is 1 November 2017, although the final NCR Guideline was only published 3 November 2017. You can contact SACRRA on or call them on 079 308 6630 or 079 789 2205.

You will also be required to pay a once-off fee, which will be announced in December 2017, to cover the onboarding process. The following data submission timeframes are important:

  • New credit agreements, within 48 hours from being concluded;
  • Closed, terminated, rescinded or settled credit agreements, within 48 hours of being closed, terminated, rescinded or settled;
  • Monthly payment profile information, within 5 business days of the agreed billing cycle;
  • Adverse information (subject to regulation 19(4) and (7), on a monthly basis;
  • Settlement of adverse information or judgments, within 7 days from the settlement

The above, read with changes required by the context of being a data provider, apply to the reporting of credit information to credit bureaux by all data providers, including insurers.

The NCR made it clear that failure by data providers to comply with the requirements set out in the NCR Guideline will result in their access to payment profile information being denied by the credit bureaux. This may affect their ability to properly assess the risk before entering into an agreement with a consumer.

Please click here to download a copy of the NCR Guideline.

Please click here to download a copy of the SACRRA Guideline.

Please click here to download a copy of the SACRRA Assessment Form.

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