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Guarantee insurance
Sunday, March 1, 2009
Safety in numbers

Intermediaries who at present receive premiums on behalf of insurers must be in possession of a guarantee. One can be obtained from the Intermediaries Guarantee Facility Limited (IGF), which was set up precisely for this purpose by the short-term insurance industry.

This ensures brokers comply with Regulation 4, Section 45 of the Short Term Insurance Act, of 1998. The guarantee must be for an amount equal to 30% of the net premiums received by them in their last financial year based on a minimum guarantee of R100 000 and a maximum guarantee of R70m – the new top limit effective 1st Aptil 2009.
Each insurer must individually and specifically authorise in writing each of its intermediaries, which it empowers to collect premiums on its behalf. The insurer must ensure that the authorised intermediary has a current guarantee. For his part the intermediary must also ensure he holds such authorisation.
If the intermediary has a collecting agency or a third party receiving premiums on his behalf for insurers, he should ensure that the agency or third party also has a guarantee in terms of Regulation 4. Intermediaries are deemed to “receive premiums” where the premium passes through a bank account controlled by the intermediary. Where the intermediary merely collects cheques issued in favour of the insurer from the client and delivers them to the insurer, no authorisation or guarantee is required.
The IGF has raised its non- refundable application fee from R300 to R350, effective 1 January 2009.
For further information, documentation and application forms please visit IGF’s webpage at www.igfsec45.co.za.
 

Copyright © Insurance Times and Investments® Vol:22.3 1st March, 2009
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