KB Cash Loans from Kuruman recently featured in a settlement agreement with the Registrar of Financial Services for a contravention of the FAIS Act.
For about a year, from November 2010, it advised its cash loan clients to take out group scheme funeral cover underwritten by Resolution Life.
KB Cash Loans received and accounted for premiums, and also handled death claims on behalf of the insurer. This constituted financial services as defined in Section 1 of the FAIS Act for which it was not duly licenced.
KB Cash Loans agreed to pay a penalty of R50 000.
It is not clear from the settlement agreement whether action was taken against Resolution Life for conducting business with an unlicensed entity, as is required by the same Act.