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A Pinetown short-term insurance broker, who has allegedly raked in more than R5 million in premiums from hundreds of clients in the past three years, is under investigation by the police and the Financial Services Board (FSB).
It is alleged that his company is unregistered and that he is committing fraud and is not paying out claims.
The FSB has secured an interim order, in the Durban High Court, directing Pieter de Wett, of Model Insurance, which trades from Crompton Street, to stop acting as a broker, disable the company’s website and give the board details of his estimated 900 clients.
The company has been under investigation since September 2010 and, according to an internal police memorandum attached to court papers which came before Acting Judge Glenn Thatcher, in spite of collecting premiums “there is no evidence that he is paying the money to an insurance company”.
A Lieutenant-Colonel Mo-han said in an e-mail to the board that “it seems he is spending the money for his personal use”.
In just one complaint to the short-term insurance ombudsman, client Rouan Pillai said he had been trying for two years to claim R35 000 for his stolen car.
“All my calls are ignored. They swear at me telephonically,” he said, alleging that when he went to the office De Wett had become aggressive.
David Mbetse said he had insured his Mercedes-Benz for R300 000 in June. On July 1, after another vehicle crashed into his, he contacted Model Insurance and was told by a “Ria de Wet” that she would e-mail forms to him.
Four hours later he received a call from a rude “white gentleman” who said his claim would not be honoured “because I had not taken the car for inspection”.
The FSB, represented by advocate Vishalan Naidu, said in its court application that the first complaint about the company’s lack of a valid licence was received three years ago.
The complaint was referred to De Wett, who gave the assurance that Model Insurance had stopped conducting short-term insurance business.
FSB executive Jonathan Dixon said this was not true and in December the next year the board again wrote to him warning that unless he stopped, the matter would be referred to the police and National Prosecuting Authority.
The e-mailed response was: “Please note that we will be registered by Mei (sic) 2012.”
Not satisfied, the FSB referred the matter to the police for investigation. It was discovered that the company was already under investigation because of a complaint from financial services providers.
In spite of a press statement warning the public about the investigation, Model Insurance continued trading and reeling in clients. And, Dixon said, the complaints continued.
One client, Sabelo Khuzwayo, said: “There is only one lady working at reception – the call centre is not functional.”
Another, Aadil Malek, complained that the company had refused to pay out for his stolen vehicle.
He said after “two weeks of constant contact”, he had received a two-line e-mail “from the lady at the front desk, not management”, stating that due to negligence “they will not be paying me”.
Dixon said that in July the police applied for a subpoena to be served on a company called Netcash which would provide evidence of premiums received. The evidence was to be handed to Model Insurance.
“Our registrar then received a letter from Lieutenant-Colonel Mohan saying that, to the surprise of the SAPS, it had been established that the company had almost 900 clients, not 85 as was originally believed.”
In the letter, Mohan said between October 2010 and April this year, the company had received about R200 000 a month from Netcash – a total of about R5.2 million.
He suggested that the FSB seize files and computers and close the business before more unsuspecting people were defrauded.
Dixon said the court application was urgent because the company continued to dupe unsuspecting members of the public, exposing them to financial loss.
De Wett has until October 22 to file opposing papers.