The Financial Services Board (FSB) on Tuesday announced that it imposed a penalty of R100 000 on Avbob Mutual Assurance Society on December 1 2017.
This followed after the registrar of long-term insurance referred a case against funeral insurance provider Avbob to the FSB’s Enforcement Committee for the violation of policy holder protection rules.
The case involved an intermediary agreement Avbob entered into on October 28 2010 with a Mr T Nyadombo, who provided services as an intermediary for a savings product underwritten by Avbob.
On December 10 2014, Nyadombo’s authorisation was withdrawn. However, he continued unlawfully selling products on behalf of Avbob, therefore contravening policy rules.
Among aggravating factors, the financial services regulator said that “Avbob failed to demonstrate sound insurance principles and practice in the interests of the policyholders”.
Avbob was also not aware of the changes on Nyadombo’s FSP licence until the contravention was brought to its attention by the registrar’s office, said the FSB.
In mitigation it was taken into account that Avbob accepted responsibility for the violation, cooperated with the investigation and the subsequent enforcement action, and implemented measures to prevent similar contraventions from recurring.