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Cape Town - Two of South Africa's biggest financial services companies have been fined by the Financial Services Board (FSB).
Lion of Africa Life Assurance Company was slapped with a R200 000 penalty for cancelling funeral insurance business group schemes without informing the Registrar of Long-term Insurance of the cancellations. It also failed to inform the policyholders.
Aggravating factors, said the FSB in a statement on Thursday, were that Lion of Africa failed to demonstrate sound insurance principles and practice in the interest of policyholders, and that it failed to ensure that its internal controls functioned properly.
It added that in mitigation, it was taken into account that the insurer admitted the contravention, cooperated with the registrar’s investigation and the subsequent enforcement action, and that it undertook to implement measures to prevent this from recurring.
The enforcement committee - an administrative body which has the authority to impose penalties on offenders who breach FSB rules - imposed a R200 000 fine on Lion of Africa on September 8.
In a separate statement, the FSB said Sanlam Collective Investments (RF) received a R10 000 penalty for contravening the Collective Investment Schemes Act. The fine was imposed by the enforcement committee on September 12.
The FSB said the registrar took into consideration that the contravention was as a result of a bona fide oversight, and that the company has performed an audit to ensure compliance with applicable legislation.
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