To take a look at the definitions of the new categories and the requirements for aptitude and aptitude, please familiarize yourself with Council Notice 194 of 2017. One of the principles underlying the changes to the jurisdiction requirements was the principle of proportionality. Competence requirements should be proportionate and depend on the nature, scope and complexity of the financial products and financial services provided in relation to those products. Due to the above principle, the Authority distinguishes between the competence requirements necessary for the provision of services related to Tier 1 and Tier 2 products. With the introduction of the amended adjustment and ownership requirements in 2018, we have seen many changes and new requirements, but some of them are not as clear as we do not deal with them on a daily basis. I would like to draw your attention to the categorisation of financial products into levels and to some of the new product definitions that have been introduced. In the case of insurance for the contents of the household, there is no provision for accidental damage that is not automatically covered. PSPs also do not advise customers on items such as jewelry, laptops, and mobile phones that need to be specified. The term “one-time need” is used by PSPs to circumvent the requirements of paragraph 8(1)(a-c) of the Code.

Arguing that the customer only needs assistance for a specific need, such as insurance. B for its new motor vehicle, the PSPs maintain that it is not necessary to obtain all the relevant and available information, and therefore not necessary to carry out an analysis of the customer`s needs. The number of complaints relating to short-term insurance policies far exceeds that of any other category of complaint products received by the FAIS Ombudsman both in the period under review and in previous years. In 2016, the FSB at the time published a rationale accompanying the proposed aptitude assessment. The explanatory memorandum sheds light on the reasons why the authority divided the products into 2 stages. In 2017, the Insurance Act introduced new categories and subcategories of insurance activities. In 2020, the determination of suitability requirements for financial service providers was amended to ensure consistency between the subclasses of financial products included in the fitness and fitness requirements and the new classes and subclasses of insurance activities under the Insurance Act. However, it has recently been found that some of the reclassifications that have taken place under the Insurance Act have inadvertently resulted in certain complications related to fitness and suitability requirements. Most of the amendments to the regulations of the Short-Term Insurance Act concern the circumstances in which an insurer may enter into a binding contract, the respective rights and obligations of the insurer and the holder of the filing cabinet, and the remuneration that may be paid to the holder of the filing cabinet. The amendments to the short-term insurance rules published on 15 December 2017 came into force on 1 January 2018, with certain subsequent effective dates indicated below.

The corresponding amendments to the Short-Term Insurance Act 1998 (STIA) will also enter into force on 1 January 2018. There is a gap between the client`s understanding of full coverage and the understanding of the PSP. If a customer requests such coverage, the total value of the vehicle (including extras) should be covered in the event of theft or total loss. For a PSP, full coverage often means that the vehicle is insured for any eventuality up to the retail value of the vehicle, regardless of extras. It is not possible to determine if the vehicle has any extras that should be specified. For example, awnings on bakkies are not covered unless explicitly stated in the policy. For example, a representative appointed solely for the provision of services in sub-category A of long-term insurance and/or the benefits of a friendly company (Level 2 products) is not required to have a qualification recognized by the FSCA, successful completion of regulatory examinations, CPD or business training. Council Opinion 197 of 2017 on the determination of relevance and relevance introduced 6 new product categories for financial products and classified financial products into 2 steps, as shown in the table below. Therefore, some PSPs are not allowed to provide financial services in relation to the newly classified sub-categories of financial products. As a result, those financial service providers, their key persons and their representatives also do not meet some of the competence requirements applicable to the relevant sub-categories of financial products. PSPs tend not to disclose to customers the exclusions that exist with respect to their owners` policies.

This is especially true for new owners who, in the absence of these disclosures, cannot take steps to mitigate their losses. It is devastating if, for example, the roof collapses during a severe storm and the claim is rejected due to wear and tear. [An earlier version of this blog incorrectly stated that underwriting managers must disclose their filing cabinet fees. This is not the case.] The FSCA considers that the above-mentioned complications, which arose as a result of the reclassifications introduced by the Insurance Act and subsequent amendments to the requirements of fitness and fitness, were not intentional and must not lead to an undue impairment of the persons concerned. Therefore, the FSCA has decided to grant a temporary exemption to all persons concerned in order to facilitate and ensure a fair transition to the new classification of financial products under the proposed exemption. Given that these complications have manifested themselves in the conversion of insurers into concessions under the Insurance Act, this exemption will take effect retroactively and will apply as of July 1, 2020. Some of the new product categories were previously included in the existing product categories and have now been “extracted” from the previous product category and given a new name. PSPs that had the right to provide financial services in relation to the above categories (with the exception of securities and instruments) were automatically given the authority or had to request the authority to provide services in relation to the “new” products. Communication 3 of the FSCA 2021 (FAIS) sets out the following complications: Inability to obtain relevant and available information It is clear from the table above that the products listed in Level 1 are more complex products, while the products listed in Level 2 are generally easy to understand and simpler.

Participatory interest in a collective investment scheme The 2016-2017 annual report notes the following evolution of public complaints. PSPs could ask customers if a vehicle is funded or not, but very rarely offer or recommend additional coverage, which often puts customers at risk during a claim in the early stages of the loan agreement. .