The enforcement committee of the Financial Services Board (FSB) has fined Avbob Mutual Assurance Society R100 000 for allowing an intermediary to practise for one-and-a-half years without the appropriate licence.
On October 28, 2010, Avbob entered into an agreement with T Nyadombo under which Nyadombo undertook to render services as an intermediary in respect of, among other things, a savings product underwritten by Avbob. Four years later, on December 10, 2014, Nyadombo’s authorisation to render services in respect of certain financial products, including savings products, was withdrawn. From then until April 2016, Nyadombo continued to act as an intermediary for the Avbob savings product. In letting him continue selling the product, Avbob contravened the Policyholder Protection Rules under the Long Term Insurance Act, the FSB says.
As aggravating factors, the registrar noted that Avbob had failed to demonstrate sound insurance principles and that it was unaware of the changes on Nyadombo’s licence until the contravention was brought to its attention. In mitigation, the registrar took into account that Avbob accepted responsibility for the contravention and co-operated with the investigation, and undertook to implement measures to prevent similar contraventions from occurring.