Since 1994 the SA Government and its diverse regulators have enforced a number of laws and regulations that are aimed at protecting consumers against scams and scam artists and the excesses encountered in the financial services industry.
The sad thing is that neither consumers nor insurance companies are aware of the protection of consumers.
When you, as a consumer, whether it is insurance cover for your business you require or cover for your own personal use, you need protection against any bouncers and beamers that might try to sell you insurance products.
That is why the government has issued numerous regulations that look after your interests when you buy either long- or short-term insurance.
What role do intermediaries play?
- Intermediaries (Financial Advisers), cannot of their own accord sell you any products of financial services of a company.
- Insurance companies may sign agreements only with intermediaries who are licensed financial service providers or who are representatives of licensed financial service providers in terms of the FAIS Act.
- In other words this will mean that an insurance company might agree to permit a Financial Adviser to sell their products only in the range for which the intermediary is licensed to do so.
- The agreement can be cancelled at any time by either party and will lapse if the FSB cancels a Financial Adviser’s financial license or services.
When a claim is rejected:
- You have to be notified in writing of the reasons when a short- or a long-term insurance company rejects a claim that you have submitted.
- This also applies to when the amount you claim for is disputed and exactly how the insurance company arrived at their decision.
- You have a ninety day time frame in which to make representations to your insurance company.
- If you are unhappy about your claim being refuted you are still entitled to make use of the courts or to approach the short- or long-term ombudsman.
- If you decide to approach an ombudsman, you are not permitted to go the legal route.
Because much dishonest selling and many scams have arisen from hard-sell direct marketing techniques in the past, there is much emphasis that has been put into place for a requirement on direct marketers to take care at all times to provide you with honest, fair and diligent as well as skilful service.
When taking out business insurance, remember that it is important to read all the fine print before signing on the dotted line.