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 Applies3.5 Adjustment and refund of commission |
| (1) | If the provisions of a multiple premium policy are varied so that the total amount of the premium which was payable during the premium-paying term of the policy and which was used for the purpose of the calculation of commission in terms of regulation 3.4(1), is, for any reason— |
[Words preceding regulation 3.5(1)(a) substituted by regulation 4(p) of Notice No. 1437 of 2017]
| (a) | increased, the primary and secondary commission payable in relation to that increase shall be dealt with in terms of this Part as if— |
| (i) | the total amount of the increase payable during the remainder of the premium-paying term were the only premium payable under the policy; and |
| (ii) | the premium period in which that variation becomes operative were the first premium period of the policy; or |
| (b) | reduced, with effect from a date before the end of the second premium period of the policy— |
| (i) | the primary commission previously calculated in terms of regulation 3.4(1)(b) to be payable shall be recalculated in accordance with this Part in relation to the total amount of premium as so reduced and any amount of commission which has been paid, or would have been payable had the reduction not occurred, and which exceeds the amount payable in accordance with the recalculation, shall be determined by the insurer concerned; such part of that amount as exceeds the percentage in column A of the Table in subregulation (2) shall be reversed and, if already paid, shall be refunded to the insurer by the person to whom it was paid; |
| (ii) | the secondary commission previously calculated in terms of regulation 3.4(2) to be payable, shall be recalculated in accordance with this Part in relation to the total amount of primary commission as reduced in accordance with subparagraph (i) and any amount of commission which has been paid, or would have been payable had the reduction not occurred, and which exceeds the amount payable in accordance with the recalculation shall be determined by the insurer concerned; such part of that amount as exceeds the percentage in column B of the Table in subregulation (2) shall be reversed and, if already paid, shall be refunded to the insurer by the person to whom it was paid. |
(2)
| (a) | If a premium or any part thereof is— |
| (i) | for any reason refunded by the long-term insurer or, in the case of a multiple premium policy which is not— |
| (aa) | a fund policy, or |
| (bb) | a fund member policy other than a fund member policy which funds a retirement annuity fund, or |
| (cc) | a policy in respect of which commission has been paid only after each premium in respect of which it is payable has been received by the long-term insurer concerned (including but not limited to a replacement investment policy), |
[Regulation 3.5(2)(a)(i)(cc) substituted by regulation 4(q) of Notice No. 1437 of 2017]
for any reason not paid on its due date, including that the policy has been made paid-up or surrendered, but excluding termination upon a health event, a disability event or the death of a life insured, during the first two premium periods in the case of a policy referred to in items 1.1, 2.1.1, 2.2.1, 3.2.1 and 5.1.1 of Table 1 or items 1(a), 4(a)(i), 4(b)(i), 5(a)(i)(aa), 5(a)(ii)(aa), 5(c)(ii)(aa), 6(a)(i), 7, 8(a) and 8(b)(i)(aa) of Table 2 the commission payable in terms of this Part shall be recalculated by reference to the scale and shall not exceed the percentage of maximum commission in column A or B, respectively, and any amount of commission which has already been paid in excess of the commission as so recalculated, shall be reversed by the long -term insurer and refunded to it by the person to whom it was paid:
[Words following Regulation 3.5(2)(a)(i)(cc) substituted by regulation 5(l) of Notice No. 1015, GG 41942, dated 28 September 2018]
Premiums received with an equivalent value to monthly premiums for— |
Column A Maximum percentage of primary commission payable |
Column B Maximum percentage of secondary commission payable |
0-6 months |
nil |
not applicable |
7 months |
29,17 |
not applicable |
8 months |
33,33 |
not applicable |
9 months |
37,5 |
not applicable |
10 months |
41,67 |
not applicable |
11 months |
45,83 |
not applicable |
12 months |
50 |
not applicable |
13 months |
54,17 |
8,3 |
14 months |
58,33 |
16,7 |
15 months |
62,5 |
25 |
16 months |
66,67 |
33,3 |
17 months |
70,83 |
41,7 |
18 months |
75 |
50 |
19 months |
79,17 |
58,3 |
20 months |
83,33 |
66,7 |
21 months |
87,5 |
75 |
22 months |
91,67 |
83,3 |
23 months |
95,83 |
91,7 |
24 months |
100 |
100 |
| (ii) | in the case of any policy not mentioned in subparagraph (i), for any reason refunded by the long-term insurer, or for any reason not paid on its due date, any commission paid by the long-term insurer shall be reversed and refunded to it by the person to whom it was paid; |
| (b) | Subparagraphs (i) and (ii) of paragraph (a) shall— |
| (i) | not apply to the extent that, and for so long as, payment of an unpaid premium is effected by means of the maintenance of the policy in force as contemplated in Rules 15A.2 and 15A.3 of the Policyholder Protection Rules; |
[Regulation 3.5(2)(b)(i) substituted by regulation 5(m) of Notice No. 1015, GG 41942, dated 28 September 2018]
| (ii) | be deemed not to have been applicable if and to the extent that, any premium or part thereof which was unpaid is later paid to the long-term insurer, and in that event any reversed commission refunded to the long-term insurer may again be paid to the person by whom it was refunded. |