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The Financial Services Conduct Authority has imposed a R550 000 penalty on insurer Channel Life for not properly registering intermediaries who collected insurance premiums on its behalf, and for not paying out sufficient funeral service benefits to 33 policyholders.
In an order published on Wednesday, the financial regulator said Channel Life had concluded agreements with 168 people - referred to as "runners" - to collect insurance premiums on its behalf.
The runners, however, were not properly authorised to collect premiums. They had not registered as representatives of the insurer.
Channel Life had argued that the intermediaries were only performing "mechanical duties" and did not need to be registered, but the regulator found this was not the case as the runners had handled the funds of clients.
It imposed an administrative penalty of R250 000 on the insurer for using the "runners".
The regulator also imposed a separate R300 000 penalty on Channel Life for not paying out sufficient benefits for funeral services to 33 policy holders. The regulator directed that Channel pay out an amount of R100 000, in total, to the 33 affected policyholders.
