SAIA Code of Conduct: a new commitment to self-regulation

01 February 2010 Viviene Pearson, SAIA

The launch of the new SAIA Code of Conduct in March heralds a new commitment to self-regulation in the short-term industry that is on par with international trends.

Despite the array of onerous and stringent legislation and regulation on various fronts, and following many debates, on many levels, around the issue of self-regulation, the decision was made that self-regulation was indeed necessary, and desirable in the short-term industry.

This decision was influenced by the perceived expectation that industry bodies should have an appropriate Code among several relevant bodies, including the Financial Services Board (FSB), by international precedent, by the international and now FSB supported Treat Customers Fairly initiative, as well as by the expectation of industry codes as best practice by the South African Consumer Protection Act.

A new Code was subsequently drafted to measure up to international and the latest South African examples.

The objective

The purpose of the new SAIA Code is to:
• promote high ethical standards and good business practices in the short-term insurance industry by giving specific guidance on acceptable and unacceptable practices in all the phases and relationships of short-term insurance business; and
• give current and potential customers of short-term insurance products a clear indication of the self-imposed guidelines followed voluntarily by SAIA members who provide such products to them.

The new SAIA Code of Conduct, approved by the SAIA Board at the end of 2009 for an initial trial period of one year, is the result of a long process of industry participation and debate following an initial draft, put together using relevant South African and international examples. The one year trial period starts after the formal launch of the Code to members, which will happen in the middle of March 2010. The SAIA and its members are currently involved in a communication and buy-in process in order to ensure that this Code will be a Code that is lived by SAIA members, and not something that will be put on the back burner.

Extending the contractual relationship

The new SAIA Code extends to contractual relationships insurers may have with third parties, including administration agents, assessors, claims managers, collection agents, investigators, loss-adjusters, service providers, underwriting managers, as well as intermediaries, when acting on behalf of the insurer.

It is therefore vital that the SAIA communicates the requirements of this new SAIA Code to the business partners of the insurers. The Financial Intermediaries Association (FIA) and the Institute for Loss Adjusters (ILA) were invited to participate in the SAIA Code of Conduct Task Team that debated and finalised the SAIA Code of Conduct from the beginning of the process. In addition, the SAIA will create awareness about the new Code and its requirements in the period immediately following the launch to our members in March 2010.

Other stakeholders, such as the Financial Services Board (FSB) and the Ombudsman for Short-term Insurance (Osti), are also included in a SAIA stakeholder communication plan following the launch. In addition to this formal process to be followed in the second quarter of 2010, the Ombudsman, Brian Martin, participated fully in the SAIA Code of Conduct Task Team, and the FSB was kept informed about the progress on an ongoing basis.

fanews magazine
FAnews April 2024 Get the latest issue of FAnews

This month's headlines

FAIS Ombud lashes broker for multiple compliance blunders
TCF… a regulatory misfit initiative?
The impact of NHI on medical malpractice insurance
Fixed versus variable: can you have your cake and eat it too?
The future world of work
Subscribe now