The Financial Services Board (FSB) has announced that its Registrar of Short-term Insurance has referred a matter against Saxum Insurance Limited to its Enforcement Committee.
According to the FSB Saxum Insurance allowed 20 independent intermediaries to collect premiums in respect of short-term insurance policies underwritten by it without valid guarantees, during the period from July 2013 to June 2014.
When Justmoney contacted Saxum, they declined to comment on the matter.
The fine
The Registrar fined the insurer R200, 000 in penalties for the contravention.
However, the Registrar considered that Saxum Insurance accepted responsibility for the infringement.
Furthermore, Saxum fixed the contravention by replacing the invalid guarantees with valid guarantees issued by a bank, and fully cooperated with the Registrar during the enforcement process.
Therefore, the Registrar agreed to a penalty of R200 000, which was imposed by the Enforcement Committee on 26 February 2015.
Previous charges
However, this is not the first time that Saxum has been referred to the Enforcement Committee.
In 2014 the FSB said that during the period from October 2012 to February 2013, Saxum Insurance failed to authorise a Financial Services Provider (FSP), in writing, to collect premiums on its behalf.
"Despite the lack of written authority, Saxum Insurance permitted the FSP to collect premiums and accepted the premiums in its bank account," said FSB.
The Registrar agreed to a penalty of R75 000, which was imposed by the Enforcement Committee on 31 July 2014.