A single mother of two children pleaded with the Financial Services Tribunal (FST) for her debarment to be lifted, saying it would be extremely difficult for her to find employment outside the financial services industry.
The applicant, “SP”, was dismissed and subsequently debarred by OUTsurance after finding her guilty of creating fictitious insurance policies to boost her remuneration.
In her reconsideration application, SP did not dispute the guilty finding but said the FSP had not followed a fair debarment procedure. She also pleaded for leniency because of her personal circumstances and because she was a first-time offender.
SP was employed by OUTsurance as a commercial insurance agent in March 2019. She was paid a fixed monthly retainer for the first four months her employment. Subsequently, her performance was reviewed every six months. If the premiums she generated were below the set targets, her retainer would be reduced.
In September last year, an annual compliance audit found that SP submitted fictitious policy applications to prove to her head of department that she had sold sufficient policies to justify a higher retainer.
While OUTsurance’s internal investigators were in the process of compiling evidence to charge her and refer the matter to internal disciplinary inquiry, they received an email from a client querying a payment. Upon investigation, it was discovered that SP defrauded the client of about R270 000 by falsifying an OUTsurance document. She replaced the insurer’s bank account with her own so that the client paid the premiums to her.
SP resigned with immediate effect on 27 September after she was notified of her suspension and that a disciplinary inquiry would be held.
SP was sent a “termination of employment agreement” that invited her to make representations as to why she should not be debarred because she no longer complied with the Fit and Proper Requirements of honesty and integrity.
SP submitted her representations on 4 October 2023. She admitted that what she had done was of a “very serious nature”, and she did “at some stage pose a risk to the company and the clients”. SP said her conduct was the result of her “struggling severely” with a combination of mental health, physical health, personal, and financial issues.
OUTsurance debarred SP on 6 October.
She applied to the FST for her debarment to be suspended, pending the reconsideration hearing, and for her debarment to be lifted.
She said OUTsurance had notified her of her debarment on 2 October, before allowing her to represent herself at a hearing or considering her submissions as to why she should not be debarred.
OUTsurance admitted it had notified SP of her debarment on 2 October, but it said this notification was sent by mistake. The FSP said the debarment decision was taken on 6 October.
SP also told the Tribunal she had found another FSP that was willing to employ her, but she could not accept the position because of her debarment.
She further submitted: “I am a single mother of two children, aged 11 and 3, and I am solely responsible for them financially. I cannot provide for them if I am unemployed, and with the employment rate being so high, it will prove extremely difficult to find employment in a completely new industry. I have spent 14 years studying and gaining experience and knowledge in the financial services industry. This is all I know. This is my first transgression of such a nature, and I feel that the implications are harsh.”
In an affidavit, SP said: “I am requesting this debarment to be suspended for the reason that we are all human and all make mistakes and learn from them.”
In an affidavit in support of her suspension application, she said: “I am truly remorseful and genuinely apologetic for what has transpired and my actions, and I can assure you that nothing of this nature would ever occur again. I am pleading for a chance to start off on a clean slate at an alternative FSP and would appreciate the opportunity to do so.”
In its opposing affidavit, OUTsurance presented evidence of other transgressions it alleged SP committed while in the insurer’s employ. The alleged transgressions ranged from fraud to allegations by one of SP’s subordinates that she got the broker involved with a loan-shark business. OUTsurance presented a transcription of a telephone conversation in which SP confesses to having defrauded one of the insurer’s customers of about R270 000.
During the Tribunal hearing, SP confirmed that she did not deny the findings that resulted in her debarment. But she pleaded for clemency based on her personal circumstances as a single mother, and because she did not have another career.
The Tribunal found that SP’s conduct in providing the client with her bank account details to be used in depositing the premiums was fraudulent and dishonest. It agreed with OUTsurance that SP no longer complied with the Fit and Proper Requirements of honesty and integrity.
The FST dismissed the reconsideration application.
