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Gap Cover Commission Calculation

A number of Moonstone Compliance clients queried the interpretation of the commission payable in respect of GAP cover products. The following bands were provided: Individual and group policy Monthly premium band Maximum Commission Level Above R1,200 5% R601 to R1,200 10% R300 to R 600 15% Less than R300 20% Billy Seyffert, COO of Moonstone […]

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Replacements going forward

The original RDR Proposal on replacements provided that “…long-term insurers would be prohibited from paying any form of commission or fee to an intermediary in respect of the replacement of life risk policies. Intermediaries will be prohibited from accepting any remuneration other than an advice fee, subject to all applicable requirements for such advice fees, […]

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Commission on Orphan Policies

What happens to the commission of intermediaries who resign, or whose contracts with product providers are cancelled? The latest FAIS Ombud newsletter contains an example which throws some light on the subject. Ombud Case study: Are You Getting What You Paid For? This Office has, in the past few years, experienced an increase in the […]

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Intermediary Relationships after RDR

The eagerly awaited discussion document on the review of retail distribution, expected this month, has a long history. The triangular association – whereby the intermediary provides advice to the policyholder but is incentivised by the insurer, who then recoups such costs from the policyholder – is fundamentally flawed. A commission-receiving intermediary cannot, by definition, be […]

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Commission Impact on Client Returns

Rob Rusconi shocked the industry in 2004 when he did a presentation to the actuarial society on the impact of expenses on retirement provision of individuals. In the ensuing investigation by the national treasury, it came to light that commission only made up about a third of these expenses, in contrast to the figures claimed […]

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As-And-When Commission as the cure for miss-selling

The FSB invited input from 5 representative bodies on a proposed discussion document on “intermediary services and related remuneration.” In today’s article, we focus on one aspect: the considerations concerning risk business, including short-term and life assurance. The following questions form part of a more exhaustive list: Do stakeholders agree that a shift towards an […]

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