Insurance Brokers & Underwriting Intermediaries

Insurance Brokers & Underwriting Intermediaries

On 21 September 2010, Board Notice 123 of 2009 of the Financial Services Board was gazetted making it compulsory for all financial services providers to maintain suitable professional indemnity and fidelity cover as set out in the Schedule to the Notice.

In terms of the Schedule, all Category I, II and IV providers (who do not receive or hold clients’ financial products or funds) are required to have in place either guarantees of a minimum of R1 million or professional indemnity insurance cover with a minimum limit of R1 million.

Category I and IV Providers who hold their clients’ financial products or funds are in addition required to have at least R1 million fidelity insurance cover.

Category II providers who receive and hold their clients’ financial products or funds are required to have guarantees of a minimum of R5 million or professional indemnity and fidelity insurance cover with a minimum limit of R5 million.

A Category IIA provider who does not receive or hold clients’ financial products or funds is required to have suitable guarantees of a minimum amount of R5 million or professional indemnity cover for R5 million. If the Category IIA provider receives or holds clients’ financial products or funds then they are in addition required to have fidelity insurance for a minimum of R5 million.

A person who is licensed as a financial services provider after 21 September 2010 must comply with these requirements within 6 weeks of the date of authorisation.

Legislation aside, professional indemnity insurance can be structured to cover you for your very real exposure to claims arising out of alleged professional negligence, breach of confidentiality, intellectual rights and defamation. We can also arrange cover for your legal defence costs should you ever face a regulatory or disciplinary enquiry which relates to your services as a broker.

If you would like us to obtain quotes for your consideration, please contact us at info@cfpbrokers.co.za.

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Insurance Brokers & Underwriting Intermediaries

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