Representatives in the short-term industry who move to a new FSP, often take their clients with them. There are very specific legal requirements in this regard, and ignoring it can have a costly outcome.
On 2 November 2012, the Registrar debarred a representative, which it found was no longer compliant with the Fit & Proper requirements relating to honesty and integrity, and for contravention of certain provisions of the FAIS Act.
The following background is contained in a recent Appeal Board decision:
The appellant resigned from Brokerage A in 2010 and was appointed as a representative of Brokerage B.
When the appellant resigned, she transferred a number of clients to her new employer. It is not apparent from the report whether this involved a change of insurer as well.
The FSB found that she forged the signatures of two of her clients on the broker appointment letters, causing “… the profiles of the clients to be transferred from one FSP to another without their knowledge and consent. In the process, she misrepresented to the insurer that the transfer was according to the client’s instructions.”
She was debarred for two years.
Her appeal was unsuccessful as she failed to appeal within the stipulated time frame.
Although the impugned decision is dated 2 November 2012, the notice of appeal was only lodged on 4 July 2014, more than a year and a half later. In terms of section 26(2) of the Financial Services Board Act 97 of 1990 (FSB Act) an appeal of this sort “must be lodged within 30 days of the person becoming aware of, or ought to have become aware of, a decision, in the manner and on payment of the fees prescribed by the Minister.
We published an article Policy Replacement Proposals under RDR in February this year. The article summarises the proposals in respect of both long- and short-term policies, and may be worth a revisit to make sure you are on the right track.
