RE MODULE - UNIT 2

RE Preparation Module

A unit preparation designed to help you understand Compliance.

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CONTENT

UNIT 2 QUALIFYING CRITERIA

Application of "Undesirable business Practices"

Requirements to maintain an FSP License.

Declaration of business practice as "Undesirable"

Assisting in maintaining and FSP license.

Reparation for continuing with "undesirable practices"

Display of licenses.

Suspension, withdrawal or lapsing of a license.

Prescribed offences and penalties

Undesirable Practices

Introduction

A Brief Recap of the Previous Unit

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Sequence tab // Sequence Title

WHAT IS THE RE5 EXAM?

ROLES OF THE COMPLIANCE OFFICER

FAIS Act and Subordinate legislation.

UNIT 1 RECAPP

LIFE VS. NON LIFE INSURANCE

WHO ARE THE FSCA?

FINANCIALSERVICES AND PRODUCTS

Development

Let's Begin With Task 2!

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Introduction // FSP LICENCES

Requirements to maintain an FSP Licence.

Development // Process to Apply for FSP License

FSP LICENCE

LICENCE RESTRICTION

APPLICANT

DISPLAY

CATEGORY, SUB CATEGORY AND FINANCIAL SERVICES THE FSP WILL RENDER

CONDITIONS ON THE FSP AND KEY INDIVIDUAL

HAS TO BE VISIBLY DISPLAYED AT ALL TIMES

FSCA

CAN BE SUSPENDED/WITHDRAWN

LICENSE APPLICATION FEE

RELEVANT SUPPORTING DOCUMENTS

CLASSIFICATION CATEGORY OF THE FSP

CATEGORY, SUBCATEGORY/PRODUCT THE FSP WILL RENDER

Development // Standard License Conditions

FSP is to notify the Commissioner (in writing) of ANY profile changes within 15 days.

FSP deals only with products of authorised/licensed Insurers/ FSP

Standard License Conditions

FSP must have a Key Individual at all times or notify the Registrar/Commissioner of a change within 15 days.

Changes in the business name mean that an amended licence must be requested

Representatives' info must be recorded and updated on the Representatives register. Updates are to be submitted to the Commisioner within 15 days.

Development // WHAT IS FIT AND PROPER?

BOARD NOTICE 194 OF 2017

FIT AND PROPER REQUIREMENTS

ALL REPRESENTATIVES MUST ACT IN ACCORDANCE WITH THE FOLLOWING:

• Honesty
• Integrity
• Financial Soundness
• Good Standing
• Competency

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Test Your Knowldge:

Assist in Maintaining an FSP Licence

DEVELOPMENT // DISPLAY OF LICENCES

The Importance of Displaying Licences

DEVELOPMENT // DISPLAY OF LICENCES

Display ORIGINAL or Certified Copy in every business premises.

Must refer to FAIS AUTHORISATION in ALL business documents, advertisements & other promotional material.

The license must be avaliable upon request.

LICENCES

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Suspension, Withdrawl or lapsing of licence.

DEVELOPMENT // MAINTAINING AN FSP LICENCE

A Suspension or Withdrawl of a license means that an FSP is NO LONGER authorised to act as a financial services provider AND RENDER FINANCIAL SERVICES

Withdrawl

Suspension

Financial Services

Licence

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Withdrawal of a license will result in the financial services of the business being closed down.

Withdrawl

Suspension

A suspension is when the licence is taken away temporarily so that a matter can be investigated or corrected.

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Reasons for Suspension or Withdrawl

Failure to pay levies, administrative penalties or any interest.

The licensee or Key Individual no longer meets Fit and Proper Requirements.

Operating without an approved Key Individual.

Failure to comply with FAIS Act directives.

Non-disclosure of all relevant info or provided false or misleading info.

Failure to comply with licence conditions and restrictions.

Failure to comply with any other provision of the FAIS Act and GCOC.

DEVELOPMENT // MAINTAINING AN FSP LICENCE

FSP becomes permanently incapable of carrying on business due to physical or mental disease or serious injury.

FSP

FSP Finally liquidated or dissolved

FSP financially sequestrated

The business of the FSP is dormant.

FSP dies

Natural Person

FSP voluntarily and finally surrenders the licence to the FSCA.

Lapsing Of A Licence

DEVELOPMENT // MAINTAINING AN FSP LICENCE

"Undesirable Practices"

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Harm the relations between FSP's , clients or public.

Unreasonably predjudice any client

Deceiving Clients

Undesirable Business Practices

FSCA/Authority

Unfairly affect Clients

Defeat objectives of the FAIS Act

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Test Your Knowldge:

Application of "Undesirable" business practices.

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Declaration of business practice as "undesirable"

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Penalties & Fines

R10 million fine.

10 years imprisonment

Undesirable Business Practices

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Reparation for continuing with "Undesirable Practices"

More Info

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Prescribed offences and penalties

DEVELOPMENT // MAINTAINING AN FSP LICENCE

Failure to display licence certificate

Failure to make reference to authorisation in business docs

Failure to get an authorisation to operate as an FSP.

Failure to produce license on request

Punishable Offences relating to Licences

Violating License Conditions

Violating License Conditions

Violating License Conditions

Failure to ensure that the business owners are Fit & Proper

Failure to notify Registrar of changes in the profile of the FSP

Failure to comply with the directive

Closure

Lets discuss what we have learned!

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Closure

Revision Revision and Discussion

Maintaining and Assisting in Maintaining an FSP Licence

Prescribed Offences and Penalties

Undesirable Practices

Closure

Bibliography

01

"Task 2 QC 1"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/WQt7ABrAt1U?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

02

"Task 2 QC 2"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/TCW5KdUOUW0?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

"Task 2 QC 3"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/GZ25Lij__IM?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

03

04

"Task 2 QC 4"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/bfyA0Sydpa8?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

"Task 2 QC 5"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/X096Pm7IpsY?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

05

06

"Task 2 QC 6"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/iTwHPMMpnaY?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

Closure

Bibliography

07

"Task 2 QC 7"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/0B5G6On8nHc?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

08

"Task 2 QC 8"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/BvkFj0C0Kvs?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

"Task 2 QC 9"; Youtube; Uploaded by RE5 Exam Preparation (Inseta); May 31st 2021, <https://youtu.be/Z_TnCq2r6aU?list=PLDG_u2RxaazoCPNODND8bryrPVkeJmsNh>

09

"Regulatory Exam Preparation Guide"; Integrity Academy; Johann Cloete CFP; Version 1.7, Updated 2023.

10

Let’s keeplearning!

We will continue next session with Learning Unit 3. Thank you all for joining!

NON-LIFE INSURANCE

INDEMNIFYING INSURANCE

This type of insurance (also referred to as Short-Term Insurance). This type of cover seeks to put you in the financial position that you were in before the insurered event occured

• House hold and building content
• Motor insurance

Is Replaced By

Key Individual

Key Individual

= Change In License Conditions

WHO ARE THE FSCA?

"FINANCIAL SECTOR CONDUCT AUTHORITY"

• Previously known as the FSB (Financial Services Board)
• They are the Market Conduct Regulatory Body.
• Promote Market efficiency and Consumer Education.

Change to any of the following:

• Adding or removing products or sub-categories
• Adding or removing of Representatives
• Representatives Details

• Business Structure and Name
• Directors or Shareholders or Members
• Business Addresses and Contact Details
• Bank Account Details
• Compliance Officer Details
• Key Individual Details
• Auditor and/or Accountant

FSCA will inform/notify the FSP that continues with the business practice to cease and to rectify or reinstate any damage caused within 60 days!

LIFE INSURANCE

"COMPENSATION POLICY"

These policies (also called Long-Term Insurance), seek to compensate you for your life-changing events.

• Health Policies.
• Life Insurance
• Disability Cover
• Retirement Policies