Regulatory Alerts2008-04-06
Added
Circular PI-STI-1-2008 Motor Plans
The circular recalls PI/STI/3/2007 and formally recognizes AutoPlan, underwritten by Corporate Guarantee, as a compliant motor plan insurance product alongside Motorsure, Motorite, and Optimum Vehicle Solutions. It mandates that total commissions for these products must not exceed 20% for brokers and 15% for agents, in accordance with Regulation 6 of 1998. The document requires that policyholders have free choice of insurer, agent, or broker, prohibiting conditional selling which constitutes an offence under the Act. Additionally, it stipulates that all persons providing advice on these products must be registered as agents or brokers, and all offering the product must be registered insurers meeting statutory requirements.
NAMFISA NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY
- Safeguarding the Nation's Wealth! -
Ref No.: Circular PI/STI/3/2007
Enquiries: GMT Kirsten
Circular No: PI/STI/1/2008
TO: ALL REGISTERED SHORT-TERM INSURANCE COMPANIES, BROKERS AND AGENTS, AND MOTOR VEHICLE COMPANIES.
RE: MOTOR PLANS
Purpose of Circular
The purpose of this circular is to recall circular PI/STI/3/2007 dated 27 September 2007 which was issued to the industry regarding the motor plans insurance. In this circular, PI/STI/3/2007, it was stated that currently the motor plans insurance which are underwritten as required by the Act were
- Motorsure which is underwritten by Guard Risk Ltd.
- Motorite which is underwritten by Hollard Ltd.
- Optimum Vehicle Solutions underwritten by Guard Risk Ltd
However, in response to that circular, Corporate Guarantee informed the Registrar that, they also underwrite motor plan insurance, "AutoPlan". The Autoplan which is underwritten by Corporate Guarantee is hereby considered as one of those products underwritten as required by the Act.
Commission
The total commission payable on these products, which is not classified as motor vehicle policies, are according to Regulation 6 of 1998:
- Not more than 20% to brokers
- Not more than 15% to agents
It has to be pointed out that in terms of section 60 of the Act a person has a free choice in respect of the registered insurer, the insurance agent or insurance broker through whom the policy is to be taken out. If the person is not offered such free choice, it may be construed as conditional selling which is an offence under the Act.
P.O. Box 21250 Windhoek NAMIBIA 154 Independence Avenue 8th Floor, Sanlam Centre Tel: (+264 61) 290 5000 Fax: (+264 61) 290 5157/8 www.namfisa.com.na
Registration requirements
It is important to note that all people who provide advice on motor plans insurance products must be registered under the Act as:
- An agent representing one underwriter
- A broker representing a prospective or actual policyholder.
All persons offering this product must be a registered insurer meeting the requirements of the Act.
THUS DATED AND SIGNED THIS 9th DAY OF January 2008.
RAINER RITTER REGISTRAR: SHORT-TERM INSURANCE