Moonstone: ASISA / Intermediary Associations meeting

Discussions between product houses and intermediary body representatives take place at regular intervals. We share hereunder some of the issues discussed at the most recent meeting:

Maturing policy values on Astute

Liberty, Momentum and Metropolitan do not remove their values close to maturity, although Momentum do this for “older generation” policies. Sanlam and Old Mutual do remove their values. The main reason for the removal of values was to ensure correct and updated policy values are used. Care is taken to ensure that the advisor who is formally listed on their records is kept in the loop.

Commission and Early termination Values

The press release from the now defunct LOA on this matter was discussed, with the FIA expressing its concern about “equivalence of reward” practices and the churn which was arising from this. Flouting of equivalence of reward makes a mockery of commission regulation. ASISA would refer the concern to its members and report back.

Amendments to the General Code

The complexities surrounding the new requirement of annual reporting of policy information to clients by both product suppliers and intermediaries were discussed, and it was agreed that a joint approach would be advantageous. A further joint meeting followed by an approach to the FSB would be arranged. The requirement of a Change of Product form whenever funds were moved from one product to another also needed to be explored with the FSB.

S Referencing and debarment

It was noted that the S Reference process was being discontinued. A point was made that in the FSB’s debarment process, an intermediary should not be suspended prior to the hearing and a decision should be kept confidential pending an appeal as it had an immediate and sometimes fatal effect on an intermediary’s practice which might not be reversible even if the appeal was successful.