The Financial Sector Conduct Authority has fined a removal company R1.1 million and debarred its owner for eight years for issuing short-term insurance policies without being licensed as an insurer.
The regulatory action against Kings International Removers (Pty) Ltd and Rolf Michael Lamers followed an FSCA investigation triggered by a complaint by one of their clients, the Authority said in a statement last week.
According to the Authority’s administrative penalty order of 22 January, Kings International and Lamers, its director and key person, contravened, among others, sections 7(1) and 8(9)(c) of the FAIS Act, section 7(1) and 8(2)(d) of the Short-term Insurance Act (STIA), and section 5(1) of the Insurance Act from 1 January 2017 to 30 September 2023.
Section 7(1) of the FAIS Act prohibits any person from rendering financial services as a financial services provider unless they are authorised under a licence issued by the FSCA or fall within an exemption provided by the Act.
Section 8(9)(c) prohibits anyone from making statements, advertisements, or other communications about financial services, a provider’s business, or financial products if they know that the information is false, misleading, deceptive, against the public interest, or factually incorrect.
In terms of section 7(1) of the STIA, no one may conduct short-term insurance business without being registered as a short-term insurer and is authorised to carry on the kind of short-term insurance business concerned. Section 8(2)(d) prohibits rendering short-term insurance intermediary services without authorisation.
In terms of section 5(1) of the Insurance Act, no individual or entity can operate as an insurer – offering, underwriting, or carrying risk under insurance policies – without authorisation from the Prudential Authority.
Kings International Removers states on its website that it offers “total loss” and “all risks” insurance cover.
“Total loss cover is limited to a ‘disaster’ – i.e. the ship has sunk, you never see your effects again! You cannot insure individual items and will only be covered in the unlikely event of us not being able to locate your entire shipment. All risks cover will insure you for any damages to individual items during transit, including negligence from our side,” it says.
The does not which insurer underwrites this cover.
Kings did not respond to Moonstone’s questions about the advertised cover and whether it and/or Lamers intend to file a reconsideration application with the Financial Services Tribunal.
