The FSB has published 3 Notices providing some relief to certain FSPs who perform certain types of services on behalf of insurers and certain juristic representatives. However, these exemptions will only apply if certain conditions are met by both the insurer and the FSP or juristic representative.
Category I or IV FSPs that are underwriting managers and only render specific services referred to in the definition of ‘underwriting manager’ in the Long-term and Short-term Insurance Regulations, are exempted from the requirement to maintain suitable guarantees or professional indemnity or fidelity insurance cover, subject to certain conditions being met.
Category I FSPs that only collect, account, receive or hold premiums on behalf of an insurer in respect of a financial product of that insurer are exempted from section 19(3) of the FAIS Act and from section 9(3)(b) & (c) of the Fit and Proper Requirements, subject to certain conditions being met. This means that if these FSPs comply with the conditions of the exemptions, they:
- will not be required to submit the section 19(3) report, which is also known as the auditor’s report of the separate banking account into which premiums are paid, and,
- they will not have to maintain current assets that are at least sufficient to equal current liabilities or liquid assets as prescribed.
Juristic representatives, of Category I or IV FSPs that are also insurers, who collect, account for, receive or hold premiums on behalf of that insurer in respect of financial products of that insurer, are exempted from the requirements of section 13(1)(c) of the FAIS Act. Section 13(1)(c) prohibits any person from contracting in respect of a financial service or rendering a financial service other than in the name of the FSP of which that person is a representative. It is important to note that both the insurer and the juristic representative must meet certain terms and conditions for the exemption to apply.
Click on the links below to read the notices published by the FSB: