SAIA’s view on Sambra’s pay-before-release policy

30 September 2019 SAIA
Nico Esterhuizen

Nico Esterhuizen

The South African Insurance Association (SAIA) has noted the statements made through the media by the South African Motor Body Repairers’ Association (Sambra) stating that the motor-body repair industry was under a lot of pressure as a result of non-payment or delayed payments for the work done on behalf of insurers.

The association also stated that as a result of these non-payments or delays in payments to its members, it has therefore implemented a pay-before-release policy. 

SAIA fully appreciate the challenges that motor body repairers face in terms of constrained cash-flow and the need to operate sustainable operations. As an industry body, we have met with Sambra before and agreed that the association furnishes the SAIA with certain information which will enable us to liaise with our members in a bid to find an amicable solution to the challenges faced by Sambra members. 

It is important to focus on those specific arrangements that cause these challenges and not to assume and create a perception that these challenges are systemic and industry wide. These recent challenges have occurred due to complex outsourcing arrangements and mostly in relation to a non-SAIA member insurance company that has apparently been caught in liquidity challenges due to corporate governance failures at its holding company. 

As many non-life insurance companies outsource activities to third parties, we recognise that it may not always be easy to identify and contact the relevant insurer when challenges are experienced.  For this reason, SAIA has agreed to include in the SAIA Code of Conduct a requirement that SAIA members should require that all outsourced parties must disclose the authorising insurer and the name of the relevant person at the insurer. These draft amendments are currently under review within the SAIA governance structures for approval and adoption. 

SAIA continues to encourage dialogue with insurers who have existing and in many cases longstanding relationships with Sambra and its members to address any challenges if and when they occur in order to ensure good outcomes for customers.


For more information contact Nico Esterhuizen at SAIA.

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