The Financial Services Tribunal (FST) has described as improbable a broker’s version of how a house owned by his brother came to be insured on the same day it was set on fire.
The broker was employed by Sanlam Life as an associate adviser on contract through Sanlam’s short-term partners, Santam and MiWay.
On 20 October 2022, the owner of a house in Springs registered a claim with Santam for the damage to the property caused by a fire, which the policyholder said occurred at 9.20am on 18 October.
But the claim registration did not result in a pay-out. Instead, it prompted an investigation, which found there was sufficient evidence to prove that the fire occurred before the house had been added to the owner’s policy.
According to the findings of the investigation, the sheriff of the court arrived at the house at 8am on 18 October to execute an eviction letter on behalf of the owner, who was also the broker’s brother. Immediately after the sheriff had spoken to the occupant, the latter went back into the house and set it alight.
The sheriff contacted the fire brigade at 8.12am. The police were informed, as was the owner of the house, who arrived at the scene shortly thereafter.
The broker contacted Santam at 8.50am and added the property to his brother’s policy and demanded that the cover must take effect with immediate effect.
The broker visited the scene between 11am and 12pm and made enquiries with the neighbours.
The investigation concluded that the broker acted dishonestly by misrepresenting the sequence of events. He was dismissed in November last year and debarred in April this year.
Dispute over the timeline
The broker brought his reconsideration application on procedural and substantive grounds.
Regarding procedure, he submitted that he was not informed of the debarment process or provided with an opportunity to present his case. But the Tribunal found that Sanlam had adhere to the procedural requirements set out in section 14 of the FAIS Act, and the broker had been afforded an opportunity to be heard.
Turning to the merits, the broker suggested that the sequence of events, as disclosed during the investigation instituted at the behest of Sanlam, was not correct.
But the Tribunal said the broker had not provided any cogent evidence or information to contradict the timeline set out by the investigator. His only response was that he did not have the authority to request reports from the fire department or the police to verify the timeline of events on 18 October.
The Tribunal said the broker did not dispute that he arrived at the scene between 11am and 12pm.
Second, he neither confirmed nor denied that at about 8.50am he contacted Santam and added the house to the policy, stating the cover must be incepted immediately. Indeed, he could not deny this because he was aware that Santam’s forensic services team obtained copies of call recordings and documentary evidence, the FST said.
It was a fact that the sheriff arrived at the house at 8am. That the house was set alight between 8am and 8.12am could not be reliably disputed. An official from the fire department confirmed that the sheriff contacted the Springs fire brigade at 8.12am.
The Tribunal said the broker suggested to the investigator that he wanted immediate inception of cover for the house because the tenant was to vacate the property or be evicted therefrom, presumably on 18 October. According to the investigator, the policyholder wanted the house to be covered because he wanted to take occupation of the house after the occupant or tenant had vacated it.
But the Tribunal said the sheriff did not serve an eviction order but an eviction letter. Therefore, the urgency in wanting the inception of the policy to cover the house could only have been driven by the fact that the house was set on fire before inception.
The FST said there was another “worrisome” issue that made the debarment decision “unassailable”. The broker suggested that the policyholder instructed him to add the house to the policy on 17 October, but he could not do this because his portal was offline. It was, however, established during the investigation that the broker’s portal was operational at all material times on 17 October.
The other inexplicable aspect that made the broker’s version “wholly improbable” was the fact that the owner never insured the house while it was occupied by a squatter but wished to have it immediately insured a night before delivery of the eviction letter.
The Tribunal agreed with Sanlam’s finding that the broker acted dishonestly by providing misleading information and dismissed his reconsideration application.
