The Financial Sector Conduct Authority has taken enforcement action against The Relocations Group (Pty) Ltd and its director, Kyle Bary Tiltman, following an investigation that uncovered the provision of insurance products without authorisation.
The enforcement action includes a R12.6-million administrative penalty, for which the company and Tiltman are jointly and severally liable, and a 15-year debarment preventing Tiltman from participating in the financial sector.
The FSCA announced the enforcement action on Tuesday after an investigation triggered by client complaints.
According to the Authority, the investigation found that South African Relocations (Pty) Ltd and its successor, The Relocations Group, had offered marine insurance policies to the public without being licensed to do so. Both companies were under Tiltman’s control during the period in question.
The FSCA found that their conduct breached several legislative provisions aimed at ensuring that entities offering financial or insurance products are properly supervised, financially sound, and compliant with consumer-protection safeguards.
Section 7(1) of the Short-term Insurance Act prohibits any person or entity from carrying on short-term insurance business, including offering or underwriting policies, unless registered as a short-term insurer. According to the FSCA, the companies issued marine insurance policies without being registered insurers and therefore contravened this provision.
Section 5(1) of the Insurance Act similarly restricts insurance activity to those authorised under the Act. It makes clear that no person may conduct insurance business in South Africa without a licence issued by the Prudential Authority. The FSCA found that both SA Relocations and The Relocations Group operated in breach of this requirement.
In addition, the FSCA said Tiltman contravened section 139 of the Financial Sector Regulation Act, which deals with investigations conducted by financial sector regulators. It includes:
- Section 139(1), which prohibits any conduct that obstructs or hinders an investigation;
- Section 139(2), which requires individuals to comply with directives or notices issued by investigators; and
- Section 139(4), which makes it an offence to refuse reasonable requests for information or records.
The FSCA found that Tiltman refused to co-operate with investigators, which constituted a breach of all three sub-sections. The Authority stated that his actions interfered with the progress of the investigation and amounted to obstruction.
The Authority stated that Tiltman is prohibited for 15 years from:
- Providing, or being involved in the provision of, any financial products or services regulated by the FSCA;
- Acting as a key person in any financial institution; and
- Rendering any services to financial institutions, including through outsourcing arrangements.
