“While we commend the FSB (Financial Services Board) for promising swift enforcement action today, that action is two years overdue for the clients that have been religiously paying their insurance premiums while patently uninsured.”

That was the reaction of Barry Taylor, chairman of the Short Term Insurance Executive Committee at the Financial Intermediaries Association of Southern Africa (FIA), to last week’s Consumer Alert report about Model Insurance, a KwaZulu-Natal company which has been selling policies – mainly car insurance – despite having never been registered with the FSB and not being underwritten by a registered insurance company, as required by law.

This came to light after many of its clients complained their cars’ repair bills were not paid.

Acting on complaints, the FSB referred the matter to the police for investigation early last year.

Taylor warned that “such incidents are on the rise in a market where consumers increasingly transact for low- cost motor vehicle insurance products, without the benefit of financial advice”.

“The first line of defence for a consumer transacting for short-term insurance is to transact with an FSB-licensed insurer, preferably a member of the South African Insurance Association,” he said.

“And from an FIA perspective we would urge consumers to transact with the assistance of an FIA-member broker.”

Of course, that’s not to say a consumer wouldn’t be well served by one of this country’s reputable direct insurers.

After submitting last week’s column, I learnt from FSB spokeswoman Marrelie Victor that the board had issued a “public warning to consumers” in April last year.

That being news to me, I asked her what form that warning had taken. “A notice was placed in the Daily Sun newspaper,” she replied.

I pointed out that had the FSB sent an e-mail about Model Insurance to this country’s consumer journalists, the company would have been exposed 18 months ago.

Last week Victor said the FSB disagreed with the FIA’s statement.

“The registrar has acted reasonably and decisively in this matter,” she said.

“The unlawful conduct of Mr de Wet was referred to the South African Police Service as far back as February 2012, and the registrar has continuously co-operated with the SAPS in progressing the investigation.

“Subsequently, as you are aware, the registrar, also in 2012, issued a public warning in respect of conducting of business with Mr de Wet.

“Due to the challenges in bringing the matter to the criminal courts and new information that has recently emerged, the registrar is considering alternative remedies.”