Long Term Insurance Act, 1998 (Act No. 52 of 1998)RegulationsRegulations under the Long-term Insurance Act, 1998Part 3 : RemunerationPart 3B : Investment policies that started on or after 1 January 20093.17 Adjustment and refund of commission |
| (1) | If, within 5 years after the premium commencement date, the premium is stopped or decreased - for any reason other than where the policy ends on account of a disability event, a health event, or the death of a life insured - the insurer must reverse a proportion of any discounted commission payable or paid on premiums received. |
| (2) | The proportion of commission to be reversed based on premiums received as contemplated in terms of subregulation (1), must be calculated by applying the applicable adjustment percentage in column 2 of the Table to the ratio that the premium decrease bears to the premium in respect of which the discounted commission first was calculated. |
| (3) | If a premium or a part of it, of which the payment date falls within 5 years after the premium commencement date, is not paid to the insurer or is paid back by the insurer - for any reason other than where the premium is stopped or decreased, or where the policy ends on account of a disability event, a health event, or the death of a life insured - the insurer must reverse any discounted commission payable or paid in respect of that premium or part of it. |
| (4) | If a premium or a part of it, whether its payment date falls within or after 5 years after the premium commencement date, is not paid to the insurer or is paid back by the insurer, the insurer must reverse any undiscounted commission paid in respect of that premium or part of it. |
(5)
| (a) | If discounted or undiscounted commission paid to an independent intermediary or a representative is reversed in terms of subregulation (1), (3) or (4), the independent intermediary or representative must pay it back to the insurer. |
| (b) | If commission has been paid back to the insurer in terms of paragraph (a), and the premium in question or part of it is paid to the insurer thereafter, the insurer may again pay that commission to the independent intermediary or representative. |
| (6) | Subregulations (1) to (5) do not apply to the extent that, and for as long as, the policy is maintained in terms of Rule 15A.3 of the Policyholder Protection Rules, but not made paid-up. |
[Regulation 3.17(6) substituted by regulation 5(p) of Notice No. 1015, GG 41942, dated 28 September 2018]