R100 000 fine for New National Assurance

Cape Town - The Financial Services Board (FSB) fined New National Assurance R100 000 for failing to accept a claim from a policyholder, within a reasonable period.

This after the Registrar of short-term insurance referred a case against New National to the enforcement committee of the FSB.

"The referral related to New National contravening Rule 7.4(a) of the Policyholder Protection Rules issued under the Short-term Insurance Act, No.53 of 1998 in that it failed, within a reasonable period, to accept a claim submitted by a policyholder," the FSB said in a statement on Thursday.

As aggravating factors the Registrar considered, among other factors, that New National failed to demonstrate sound insurance principles and practice in the interest of the policyholder and by taking a lengthy period to eventually settle the claim that resulted in the policyholder not being treated fairly.

In mitigation, the Registrar took into account, among others, that New National admitted the contravention, co-operated with the Registrar’s investigation and the subsequent enforcement action and eventually settled the claim.

"Consequently, the Registrar agreed to a penalty of R100 000, which penalty was imposed by the Enforcement Committee on New National on 24 March 2017."

The enforcement committee may impose administrative penalties, compensation orders and cost orders on respondents that are found to have contravened any law administered by the FSB.