Long Term Insurance Act, 1998 (Act No. 52 of 1998)RegulationsRegulations under the Long-term Insurance Act, 1998Part 3 : RemunerationPart 3A : Limitation on Remuneration for Rendering Services as Intermediary - Policies other than Policies to which Part B Applies3.1 Application of this Part 3A, and definitions |
[Heading substituted by regulation 1.2(a) of Notice No. R. 952 of 2008]
This Part 3A applies to policies, components and benefit components other than those to which Part 3B applies, and unless the context indicates otherwise—
[Sentence following the heading substituted by regulation 1.2(a) of Notice No. R. 952 of 2008]
[Definition deleted by regulation 4(c) of Notice No. 1437 of 2001]
"annualised premium",
in relation to a group scheme or fund policy, means 12/m of the total premiums payable under the group scheme or fund policy during a scheme year, excluding transfer values inwards and credits arising in the group scheme or fund policy to employers of fund members in consequence of the withdrawal of members;
"benefit component"
means each separately identifiable kind of policy benefit undertaken to be provided under a particular kind of policy;
means a part of a policy, if any, where that part provides a policy benefit for which an identifiable, separate premium is payable;
[Definition inserted by regulation 1.2(b) of Notice No. R. 952 of 2008]
"compulsory",
in relation to an annuity, means that there is an obligation in terms of the rules of a fund to enter into a policy which provides the annuity;
for purposes of Table 1 of Annexure 1 means a group scheme under which every life insured is indebted to or a surety of the policyholder whose insurable interest as policyholder arises solely from that indebtedness or suretyship;
[Definition substituted by regulation 5(a) of Notice No. 1015, GG 41942, dated 28 September 2018]
"fund member policy"
in respect of a—
| (a) | registered insurer means an individual policy— |
| (i) | of which a fund is the policyholder; |
| (ii) | under which a specified member of the fund (or the surviving spouse, children, dependants or nominees of the member) is the life insured; and |
| (iii) | which is entered into by the fund exclusively for the purpose of funding that fund's liability to the member (or the surviving spouse, children, dependants or nominees of the member) in terms of the rules of that fund; |
| (b) | licensed insurer means a policy with an individual as defined in Schedule 2 of the Insurance Act underwritten under sub-classes (a) to (d) of the Risk class, or the Life Annuity, Individual Investment or Income Drawdown classes of life insurance business as set out in Schedule 2 of Table 1 of the Insurance Act and— |
| (i) | of which a fund is the policyholder; |
| (ii) | under which a specified member of the fund (or the surviving spouse, children, dependants or nominees of the member) is the life insured; and |
| (iii) | which is entered into by the fund exclusively for the purpose of funding that fund's liability to the member (or the surviving spouse, children, dependants or nominees of the member) in terms of the rules of that fund; |
[Definition substituted by regulation 5(b) of Notice No. 1015, GG 41942, dated 28 September 2018]
has the meaning defined in section 1 of the Companies Act;
[Definition inserted by section 4(d) of Notice No. 1437 of 2017]
| (a) | registered insurer, means a scheme or arrangement which provides for the entering into of one or more policies, other than an individual policy, in terms of which two or more persons without an insurable interest in each other, for the purposes of the scheme, are the lives insured; |
| (b) | a licensed insurer, means a policy with a group as defined in Schedule 2 of the Insurance Act; |
[Definition substituted by regulation 5(c) of Notice No. 1015, GG 41942, dated 28 September 2018]
means an annuity that is paid under a policy, where the first payment period begins within 12 months after the policy has been entered into;
[Definition inserted by regulation 1.2(c) of Notice No. R. 952 of 2008]
means a person, other than a representative, rendering services as intermediary;
"individual policy"
means—
| (a) | in respect of a registered insurer, a policy under which a particular person is the life insured, or two or more particular persons having an insurable interest in each other are the lives insured jointly; |
| (b) | in respect of a licensed insurer, a policy with an individual as defined in Schedule 2 of the Insurance Act; |
[Definition substituted by regulation 5(d) of Notice No. 1015, GG 41942, dated 28 September 2018]
"investment policy"
means a policy other than a policy which is an “excluded policy” as defined in Part 5A;
[Definition substituted by regulation 1.2(d) of Notice No. R. 952 of 2008]
means the number of months in a scheme year;
means a policy under which the premium is payable in two or more amounts;
"policy"
means a long-term policy other than a reinsurance policy;
has the meaning assigned to it in the Act, but excludes a loan in respect of the policy, or a consideration payable upon the full or partial surrender of the policy;
[Definition inserted by regulation 1.2(e) of Notice No. R. 952 of 2008]
[Definition deleted
by regulation 5(e) of Notice No. 1015, GG 41942, dated 28 September 2018]
in relation to a premium period, means the premium which is payable under a policy in respect of every separately identifiable benefit component of that policy;
[Definition substituted by regulation 4(f) of Notice No. 1437 of 2017]
"premium-paying term",
in relation to a multiple premium policy, other than a group scheme or fund policy, means the whole period during which the several amounts of premium are payable, determined by reference to—
| (a) | the longer of— |
| (i) | 10 years; or |
| (ii) | the number of complete years in the period extending from the date of commencement of the first premium period of the policy to a date— |
| (aa) | in the case of a fund member policy, 66 years; or |
| (bb) | in any other case, 75 years, after the date of birth of the life insured under the policy; or |
| (b) | if it is stated in or ascertainable from the written provisions of the policy at its commencement, and is a shorter period than that determined in accordance with paragraph (a), the shorter of— |
| (i) | the particular limited period for which those several amounts of premium are expressed to be payable; or |
| (ii) | the period during which those several amounts of premium must be paid before there shall or may— |
| (aa) | be provided a policy benefit, otherwise than upon the death of, or upon the occurrence of a health event or a disability event in relation to a life insured under the policy; or |
| (bb) | be paid, upon the surrender of the policy, consideration the amount of which is stated in or ascertainable from written provisions of the policy at its commencement; |
"premium period"
in relation to a policy other than a group scheme or a fund policy, means one of a succession of periods of time, each of 12 months' duration, the first of which commences on, and ends 12 months after, the date on which the policy is entered into or, if it is a later date, the date on which the obligation of the long-term insurer becomes operative;
"primary commission"
means commission which is payable generally in respect of all policies in accordance with this Part other than secondary commission;
"rendering services as intermediary"
means the performance by a person other than a long-term insurer or a policyholder, on behalf of a long-term insurer or a policyholder, of any act directed towards entering into, maintaining or servicing a policy or collecting, accounting for or paying premiums or providing administrative services in relation to a policy, and includes the performance of such an act in relation to a fund, a member of a fund and the agreement between the member and the fund;
"replacement investment event"
means a causal event resulting in the levying of a causal event charge in excess of 15% of the investment value or materially equivalent value of a policy, where 'causal event', 'causal event charge' and 'investment value' have the meanings assigned to them in Part 5A and 'materially equivalent value' means the value contemplated in subregulation 5.2(2)(b) of Part 5A;
[Definition substituted by regulation 4(g) of Notice No. 1437 of 2017]
means a multiple premium policy which is an investment policy, where the policyholder is or was either the policyholder or the life insured in respect of any other investment policy, and where a replacement event occurs in respect of that other investment policy within a period of 4 months before or after the replacement policy is entered into;
[Definition substituted by regulation 4(h) of Notice No. 1437 of 2017]
means an individual risk policy as defined in the Policyholder Protection Rules that is entered into as a result of a replacement as contemplated in the Policyholder Protection rules;
[Definition inserted by regulation 4(i) of Notice No. 1437 of 2017]
means a person employed or mandated by a long-term insurer for the purpose of rendering services as intermediary only in relation to policies—
| (a) | entered into or to be entered into by that insurer; |
| (b) | entered into or to be entered into by another insurer which is also part of the same group of companies that the insurer is part of; |
| (c) | entered into or to be entered into on or after 1 January 2018 by another insurer which has a written agreement with that insurer in terms of which the person employed or mandated by that insurer may render services as intermediary in relation to— |
| (i) | a class of policies of that other insurer which none of the insurers referred to in paragraphs (a) and (b) are registered to underwrite; or |
| (ii) | a class or types of policies of that other insurer which the Authority has determined by notice on the official web site; or |
| (d) | entered into prior to 1 January 2018 by another insurer which concluded a written agreement with that insurer prior to 1 January 2017 in terms of which the person employed or mandated by that insurer may render services as intermediary in relation to that other insurer's policies; |
[Definition substituted by regulation 5(f) of Notice No. 1015, GG 41942, dated 28 September 2018]
means a retirement annuity fund as defined in the Income Tax Act, 1962;
[Definition inserted by regulation 1.2(g) of Notice No. R. 952 of 2008]
means the scale of commission set out in Annexure 2 to this Part;
"secondary commission"
means commission which is payable, in addition to primary commission, in respect of certain policies only, as provided in and subject to this Part;
"scheme year",
in relation to a group scheme or a fund policy, means a period—
(a) commencing on the later of—
| (i) | the date that the fund policy or group scheme is entered into with the long-term insurer concerned, or any anniversary of that date; or |
| (ii) | the date of the appointment of an independent intermediary for the purposes of rendering services as intermediary in relation to the group scheme or fund policy; |
(b) and ending on the earlier of—
| (i) | the day preceding the commencement of the next scheme year; |
| (ii) | the date of termination of the group scheme or fund policy with that long-term insurer; or |
| (iii) | the date of termination of the appointment of the independent intermediary rendering services as intermediary in relation to that group scheme or fund policy; |
"single premium policy"
means a policy under which the premium is payable in one amount only;
"Table 1"
means Table 1 of Annexure 1 to this Part that applies to registered insurers only;
[Definition substituted by regulation 5(g) of Notice No. 1015, GG 41942, dated 28 September 2018]
means Table 2 of Annexure 1 to this Part that applies to licensed insurers only;
[Definition substituted by regulation 5(h) of Notice No. 1015, GG 41942, dated 28 September 2018]
"term cover"
means a policy under which a long-term insurer undertakes to provide policy benefits only upon—
| (a) | the life of a life insured having ended; |
| (b) | the life of a life insured having begun; |
| (c) | a health event occurring; or |
| (d) | a disability event occurring, |
during a specified period only;
means this Part 3A;
[Definition inserted by regulation 1.2(h) of Notice No. R. 952 of 2008]
"tied"
in relation to a compulsory annuity, means that there is an obligation to enter into the policy concerned with a particular insurer and no other.