Airborne Insurance Consultants (Pty) Limited are the latest company to come under fire with the Financial Service Board (FSB). They were referred by the Registrar of Short-term Insurance to the Enforcement Committee of the FSB.
The referral related to a contravention of section 8(2) (d) of the Short-term Insurance Act, 53 of 1998. “The Registrar established that during the period from 1 April 2015 to 27 August 2015 Airborne operated a fleet arrangement scheme under the name and style of Blades of Glory Rotor Wing Fleet Insurance Facility. Under the aforementioned scheme Airborne arranged and placed short-term insurance cover for aircrafts outside South Africa without obtaining the required approval from the Registrar and without adherence to the procedure set out by Directive 149 A.v. regarding the placing of insurance business outside the borders of South Africa,” stated the FSB.
In deciding a penalty the Registrar considered that the domestic market was being discriminated against by virtue of the fact that Airborne failed to obtain the Registrar’s approval for each application.
“Moreover Airborne has been penalised before in relation to a contravention of section 8(2) (d) of the Act for not following the prescribed procedure,” added the FSB.
However, it was further found and taken into account that the contravention was as a result of a misunderstanding of the law. “Airborne held a bona fidebelief that it had complied with the applicable legislation when it submitted a single application for the Blades of Glory scheme. Airborne incorrectly believed that additional aircrafts placed under the aforementioned scheme fell under the initial approval by the Registrar,” the FSB reported.
The company continued to admit to the breach and promptly rectified it after being made aware of it.
“The Registrar is not aware of any prejudice suffered by any policyholders as a result of Airborne’s conduct. Consequently, the Registrar agreed that Airborne pay a penalty of R150 000,” concluded the FSB.