The broker is not the client's keeper, says FAIS Ombud

It is not the duty of a broker to ensure that the customer complies with the provisions of an insurance policy, once he has made the client aware of his obligations, the FAIS Ombud has ruled.

In dismissing a claim brought by Bruce Mclean on behalf of Palmerios Hospitality CC, against broker Willem Jacobus du Plessis, both of East London, Charles Pillai, the Ombud for Financial Services Providers, said the Respondent could not be expected to be “the insured’s keeper”.

Mr Maclean complained to the Ombud that Mr Du Plessis, representing Willie du Plessis Financial Services, had caused him R46 000 financial loss when his insurer Santam repudiated an indemnity claim in respect of a motor vehicle that was stolen.

Santam claimed the Complainant had not fulfilled a requirement to have a VESA approved immobiliser fitted to his vehicle.

Complainant said the Respondent had never mentioned that the immobiliser needed to be VESA approved. He said the first time it ever heard of the VESA requirement was when Santam repudiated the claim.

The Complainant said the Respondent should have sent him a letter attached to the policy document highlighting the Vesa requirement. This letter, he said, should have been followed up regularly until the VESA requirement was fulfilled.

When asked by the Ombud to comment, the Respondent maintained that he had advised Complainant of the VESA requirement at quote stage and that he had in subsequent meetings with the Complainant and in letters pointed out that the requirement of a VESA approved immobiliser was still outstanding.

He also supplied the Ombud with extensive notes made during consultations with the Complainant which referred to the outstanding VESA requirement.

In reaching a finding, the Ombud said his investigations showed sufficient evidence that the Respondent did disclose the requirement of the VESA approved immobiliser to Complainant.

“Whilst there is no question about the legal duty to make disclosures of material terms to one’s client when rendering financial services, the expectation that the Respondent should have followed up until Complainant had complied with the security requirements is something I cannot agree with.

“By no stretch of the imagination can Complainant’s expectations be realistic. It was not expected of Respondent to be ‘the insured’s keeper’.

“I find on probabilities and on the undisputed evidence that the Respondent had advised Complainant of the requirement to install a VESA approved immobiliser in the vehicle.

“Once Respondent had advised Complainant of this, he owed no further obligation to ensure, as Complainant seems to believe, that he should have done so.

“I am of the view that Respondent had done everything reasonably necessary to draw Complainant’s attention to the security requirements that needed to be installed and it was Complainant’s obligation to ensure that he adhered to it,” the Ombud said.

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