Regulatory Alerts2020-09-30
Information Letter 3 of 2008 (LTST) on the Prohibition on Inducements
The Financial Services Board of South Africa issued this information letter to highlight a High Court ruling that Momentum Group’s Save Thru Spend scheme violates Section 45 of the Long-Term Insurance Act by offering extraneous inducements to policyholders. Long-term and short-term insurers must now ensure their specific products correctly interpret this statutory prohibition, distinguishing core policy benefits from extraneous rewards. Insurers are required to distribute this guidance to their appointed auditors and actuaries to guarantee ongoing regulatory compliance across all relevant contracts.
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