The Insurance Broker Council warns against gross misleading of Insurance consumers

At the annual IISA (Insurance Institute of South Africa) conference held at Sun City this week the vice President of the Insurance Broker Council (IBC) Mr Arnold van der Linde questioned the integrity of direct insurers in their advertising campaigns where the perception is created that the Professional Financial Services Provider (FSP) is an unnecessary cost in the value chain. Van der Linde urged the industry and the regulator to apply the professional code of conduct imbedded in the FAIS act that regulates the Insurance industry and the services rendered to the insurance consumer.

The FAIS act was passed by parliament in 2002 and regulates the Financial and intermediary services in South Africa. Direct insurers are creating the perception that a financial advisor or broker is cost factor that can easily be avoided by just phoning their call centre. Apart form such statements being factually and proven to be incorrect, unaware insurance buyers may find themselves in an ugly predicament when a claim arises and he or she did not have the correct advice at the time of buying such direct cover. The cost normally shows at the time of the claim when you are at the mercy of the policy wording and insurer without a knowledgeable professional advisor of broker on your side.

The IBC represents 3000 business leaders of different professional financial service providers all of whom are registered with the Financial Services Board in accordance to the FAIS legislation.

The Direct insurance advertising campaigns costs hundreds of millions of Rands and the consumer ultimately pays for these campaigns with slogans like cut out the middleman, and make the piggy in the middle disappear These campaign are nothing but a cheap shot at the consumers vulnerability in the world of insurance advise.

The insurance industry and giving of advice is now regulated. The FSP have to register and may not act as a Financial Services Provider without being registered with the FSB. The FAIS act has a code of conduct that have to be enforced or scraped said van der Linde.

The IISA conference was attended by Insurance Industry leaders throughout Southern Africa and other speakers included Mr Peter Hohman CEO of the Canadian Insurance Institute and Ian Templeton of the Charted Insurance Institute in the UK.

The annual South African Short term insurance market is more than R50 billion and is like in most countries in the world a highly competitive industry. Plus minus 89% of the market in SA make use of a Professional Financial Services Advisor in analyzing comparing and placing of their risks.

Beware of making an uninformed decision when it comes to shielding yourself against possible risk. Do not take risks when contracting someone else to take your risk and do not bargain on cheap, it might turn out to be dirt cheap, especially if it is not cheaper in price in first place said van der Linde.