Stamp Duties Act, 1968 (Act 77 of 1968)
R 385
Short-Term Insurance Act, 1998 (Act No. 53 of 1998)RegulationsRegulations under the Short-term Insurance Act, 1998 (Act No. 53 of 1998)Part 5 : Remuneration (Section 48)Part 5B : Limitation on Remuneration for Binder Functions5.8 Remuneration that may be offered or provided to a binder holder |
| (1) | An insurer may pay a binder holder a fee for services rendered under a binder agreement, if the fee is consistent with the principles referred to in regulation 5.7(1). |
| (2) | Despite subregulation (1), an insurer must not without the prior approval of the Authority referred to in subregulation (3) pay a binder holder a fee for services rendered under a binder agreement that exceeds the value listed in the Table below, reflected as a percentage of the aggregate of the total premiums payable by policyholders in respect of the policies to which the binder function relates, if that binder holder is— |
| (a) | a non-mandated intermediary that is authorised to render "advice" as defined in the FAIS Act in respect of policies; |
| (b) | a non-mandated intermediary that is an associate of another non-mandated intermediary that is authorised to render advice" as defined in the FAIS Act in respect of policies. |
Table
|
BINDER FUNCTION |
MAXIMUM FEE PAYABLE |
|
|
Enter into, vary or renew a policy - section 48A(1)(a) ("function (a)") |
Function (a) only |
3,5% |
|
Determine the wording of a policy - section 48A(1)(b) ("function (b)") |
Function (a) and one or more of functions (b) - (d) |
5% |
|
Determine premiums under a policy - section 48A(1)(c) ("function (c)") |
||
|
Determine the value of policy benefits under a policy - section 48A(1)(d) ("function (d)") |
One or more of functions (b) - (d) only |
0% |
|
Settle claims under a policy - section 48A(1)(e) |
4% |
|
| (3) | The Authority, subject to such conditions as the Authority may impose, may on application from an insurer grant approval to the insurer to pay a binder holder a fee in excess of the fees referred to in subregulation (2) if the Authority is satisfied that the fee is consistent with the principles referred to in regulation 5.7(1). |
| (4) | Any fee referred to under subregulation (1) payable to a non-mandated intermediary that may perform the service or function contemplated in section 48A(1)(e) of the Act under a binder agreement, may not constitute or be based on a percentage of the difference between an amount claimed or the maximum value of policy benefits payable under a policy and the policy benefits actually provided to a policyholder in settlement of a claim. |
| (5) | Any fee referred to under this regulation 5.8, payable to a non-mandated intermediary that is a binder holder, must be disclosed to a policyholder, which disclosure must be included in the disclosures contemplated under regulation 6.2(1)(g). |
[Regulation 5.8 inserted by regulation 5(d) of Act No. 1439 of 2017]
