| (1) | A short-term insurer may, in terms of a written agreement only, and in accordance with any requirements, limitations or prohibitions that may be prescribed by regulation, allow another person to do any one or more of the following on behalf of that insurer: |
[Words preceding section 48A(1)(a) substituted by item 13(a) of schedule 1 of Act No. 18 of 2017, GG 41388, dated 18 January 2018]
| (a) | Enter into, vary or renew a short-term policy on behalf of that insurer; |
[Section 48A(1)(a) substituted by item 13(b) of schedule 1 of Act No. 18 of 2017, GG 41388, dated 18 January 2018]
| (b) | determine the wording of a short-term policy; |
| (c) | determine premiums under a short-term policy; |
| (d) | determine the value of policy benefits under a short-term policy; |
| (e) | settle claims under a short-term policy. |
| (1A) | Subsection (1) shall not apply in the case of a short-term reinsurance policy unless and to the extent that the Authority so determines by notice in the Gazette. |
[Section 48A(1A) inserted by item 13(c) of schedule 1 of Act No. 18 of 2017]
| (2) | A written agreement referred to in subsection (1) must— |
| (a) | set out which of the activities referred to in subsection (1) that other person may perform and the particular kinds of short-term policies in respect of which those activities may be performed; |
| (b) | set out the particular kinds of short-term policies which may be entered into, varied or renewed by that other person; |
| (c) | state if that other person is authorised to determine the wording of the policies referred to in paragraph (a), and if authorised, the extent to which and the circumstances under which the wording may be determined; |
| (d) | state if that other person is authorised to determine premiums in respect of the policies referred to in paragraph (a), and if authorised, the gross premiums or the basis for the calculation of gross premiums that may be determined, and the extent to which and the circumstances under which the premiums may be determined; |
| (e) | state if that other person is authorised to determine the value of policy benefits, and if authorised, the maximum value of the policy benefits that may be determined under each kind of short-term policy referred to in paragraph (a), and the extent to which and the circumstances under which the benefits may be determined; |
| (f) | state if that other person is authorised to settle claims under the policies referred to in paragraph (a), and if authorised, the extent to which and the circumstances under which the claims may be settled; |
| (g) | state the basis on which that other person will be remunerated for services rendered in terms of paragraphs (b) to (f), which basis must be consistent with any requirements, limitations or prohibitions as may be prescribed by regulation; |
| (h) | oblige that other person to— |
| (i) | disclose to policyholders of policies referred to in paragraph (a)— |
| (aa) | the name of the relevant short-term insurer or, in the case of Lloyd's underwriters, the term "certain underwriters at Lloyd's", and the fact that that other person is acting in terms of an agreement contemplated in this section; and |
| (bb) | any remuneration payable to that person in terms of an agreement contemplated in this section; |
| (ii) | include the name of the short-term insurer or, in the case of Lloyd's underwriters underwriting the short-term policy, the term "certain underwriters at Lloyd's" in any advertisement, brochure or similar communication which relates to the short-term policy referred to in paragraph (a); |
| (iii) | keep and maintain proper books of account and other records in respect of the policies referred to in paragraph (a) and allow the short-term insurer, its statutory actuary, if appointed, and its auditors full and unfettered access to those books of account and records; and |
| (iv) | make available to the short-term insurer, its statutory actuary, if appointed, and its auditors the policies referred to in paragraph (a) and any information relating thereto, including the names, identity numbers and contact details of policyholders, insured persons and beneficiaries, upon request; |
| (i) | prohibit that other person to delegate, assign or subcontract any of the functions referred to in paragraphs (b) to (f) to another person; |
| (j) | state the circumstances under which the agreement will lapse or may be terminated, and the necessary steps that must be taken to ensure the effective and efficient termination of the agreement taking into account the interests of policyholders. |
| (3) | A written agreement referred to in subsection (1), subject to any requirements, limitations or prohibitions as may be prescribed by regulation— |
| (a) | may not authorise that other person to add an amount to any gross premium referred to in subsection (2)(d): |
| (b) | may not authorise that other person to deduct any amount from any claims referred to in subsection (2)(f); or |
| (c) | may provide or prohibit that person to directly or indirectly participate in the profits attributable to the policies referred to in subsection 2(a). |
| (4) | A person that entered into an agreement contemplated in subsection (1) with a short-term insurer or may— |
| (a) | render the services contemplated in subsection (1)(a) to (e) in respect of any kind of short-term policy issued by that short-term insurer identified in the agreement only in accordance with any requirements, limitations or prohibitions as may be prescribed by re Lloyd's underwritergulation; and |
| (b) | not render any of the services contemplated in subsection (1)(a) to (e) in respect of any kind of short-term policy issued by that short-term insurer not identified in the agreement. |
| (5) | Despite any term to the contrary contained in an agreement contemplated in subsection (1), the short-term insurer that entered into the agreement remains— |
| (a) | responsible for compliance with this Act; |
| (b) | liable for any claims relating to policies included in the agreement, including any claims that may arise because of the failure of that other person to comply with the agreement; and |
| (c) | the owner of any information and documentation relating to the policies contemplated in the agreement, which must, upon termination of the agreement, be returned to the short-term insurer. |
| (6) | Any party to a written agreement referred to in subsection (1) must on request make a copy of that agreement available to the Authority. |
[Section 48A inserted by section 46 of Act No. 27 of 2008, with effect from 1 January 2012]
