FSB: Enforcement Committee fines Nestlife Assurance Corporation Limited

The Enforcement Committee (the Committee) of the Financial Services Board, established in terms of section 10 of the Financial Services Board Act, No 97 of 1990 (the FSB Act), imposed a penalty of R100000 on Nestlife Assurance Corporation Limited (Nestlife).

The Registrar of Financial Services Providers (the Registrar) alleged that Nestlife contravened section 7(3) of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (the FAIS Act) in that Nestlife entered into agreements wherein it would underwrite funeral policies in respect of clients of certain funeral schemes. These agreements dealt with the detail of the policies including premiums, benefits, admission requirements and claims.

The funeral schemes, as at the time of entering into the aforesaid agreements, were not lawfully issued with a licence for the rendering of intermediary services in terms of section 8 of the FAIS Act, and were not representatives of intermediaries as contemplated by the FAIS Act.

The Registrar accepted the aforesaid penalty in terms of section 6B(7)(a) of the Financial Institutions (Protection of Funds) Act, No 28 of 2001. In arriving at an appropriate penalty, the Registrar considered that there was no prejudice resulting from the contravention and that Nestlife accepted accountability and was remorseful for its actions.