Short-Term Insurance Act, 1998 (Act No. 53 of 1998)Notice on Policyholder Protection Rules, 2004Part III: Basic Rules for Direct Marketers4. Basic Rules for Direct Marketers |
| 1) |
| a) | A direct marketer must at all times render services honestly, fairly, and with due skill, care and diligence. |
| b) | A direct marketer must- |
| i) | in making contact arrangements, and in all communications and dealings with a policyholder, act honourably, professionally and with due regard to the convenience of the policyholder; and |
| ii) | at the commencement of any contact, visit or call initiated by the direct marketer clearly explain the purpose thereof |
| c) | Representations made and information -provided to a policyholder by a direct marketer- |
| i) | must be factually correct; |
| ii) | must be provided in plain language, avoid uncertainty or confusion and not be misleading; |
| iii) | must be adequate and appropriate in the circumstances of the relevant marketing, taking into account the level of knowledge of the policyholder; |
| iv) | must, where provided in writing or by means of standard forms or format, be in a clear and readable print size, spacing and format; |
| v) | must, as regards all amounts, sums, values, charges, fees, remuneration or monetary obligations mentioned or referred to therein, be reflected in specific monetary terms: Provided that where any such amount, sum, value, charge, fee, remuneration or monetary obligation is not reasonably predeterminable, its basis of calculation must be adequately described; and |
| vi) | need not be duplicated or repeated to the same policyholder unless material or significant changes affecting that policyholder occur, or the relevant direct marketing renders it necessary, in which case a disclosure of the changes to the policyholder must be made to the policyholder without delay before a transaction is concluded. |
| d) | The direct marketer must disclose to the policyholder the existence of any of any circumstance which gives rise to an actual or potential conflict of interest in relation to the direct marketer, and take all reasonable steps to ensure fair treatment of the policyholder. |
| e) | Direct marketing must be rendered in accordance with the contractual relationships and reasonable requests or instructions of the policyholder, which must be executed as soon as reasonably possible and with due regard to the interests of the policyholder which must be accorded appropriate priority over any interests of the direct marketer. |
| f) | The direct marketer must not deal in any policy for own benefit, account or interest where the dealing is based upon advance knowledge of pending transactions for or with policyholders, or on any non-public information the disclosure of which would be expected to affect the costs of such policy to the policyholder |
| 2) |
| a) | A direct marketer must have appropriate procedures and systems in place to- |
| i) | record all verbal and written communications relating to the direct marketing to a policyholder as are contemplated in these Rules; |
| ii) | store and retrieve transaction documentation and all other documentation relating to the policyholder; and |
| iii) | keep the policyholder records and documentation safe from destruction. |
| b) | Records may be kept in an appropriate electronic or recorded format, which are accessible and readily reducible to written or printed form |
| c) | Disclosure records and documentation pertaining thereto must, in any particular case be kept for a period of at least five years after termination, to the knowledge of the direct marketer, of the relevant policy or, in any other case, after completion of the relevant marketing process and must be available timeously upon request to the Authority for inspection, and copies thereof must at the request of a policyholder be furnished to such holder. |
| 3) | A direct marketer must, when rendering direct marketing to a policyholder, furnish the policyholder with the following particulars at the earliest reasonable opportunity but prior to the entering into of the policy, provided that were provided orally, it must be confirmed in writing within 30 days: |
| a) | its business or trade name, and, unless contact was initiated by the policyholder, its telephone contact details; |
| b) | telephone contact details of the public officer of the direct marketer; |
| c) | name, class or type of policy involved and a reasonable and appropriate general explanation of the principles of the relevant contract and any information that would reasonably be expected to enable the policyholder to make an informed decision; |
| d) | the nature and extent of benefits for the policyholder, manner of deriving or obtaining, or payment or furnishing thereof; |
| e) | any restrictions on or penalties for early termination or withdrawal from the policy, or other effects, if any, of such termination or withdrawal: |
| f) | commission, consideration, fees, charges or brokerages payable to the direct marketer (if any) by the policyholder or by any other person, |
| g) | nature and extent of monetary obligations assumed by the policyholder (including any anticipated or contractual escalations, increases or additions), manner of compliance therewith and consequences of non-compliance; |
| h) | where provision is made for increase of premiums, abbreviated disclosures of such contractual increases; |
| i) | concise details of any special terms and conditions, exclusions, waiting periods, loadings, penalties, excesses, restrictions or circumstances in which benefits will not be provided; |
| j) | details of manner of instituting claims under the relevant policy; and |
| k) | details of manner of lodging complaints, and particulars of the Short-term Insurance Ombudsman, including that the Ombudsman is available for advice on complaints in respect of claims or other matters which have not been satisfactorily resolved by the relevant direct marketer. |
| 4) | A provision of a Rule in this Part is not applicable to a direct marketer in any case where a compliance duty in respect of the same matter is imposed on the direct marketer by, in terms or by virtue of any other law. |