Time runs out for forwarding industry selling insurance illegally ALAN PEAT THOSE IN the forwarding industry who have not yet registered and been licensed by the Financial Services Board (FSB) to sell insurance as an ancillary business are in for the big chop in the next few weeks. That is the warning from Riaan Grobbelaar, MD of Prestmarine, after a meeting last week with the FSB where he was told that the forwarding industry has been very slow to react to the new Financial Advisory and Intermediary Services Act (FAISA) - which requires financial advisers and intermediary service providers to become registered and licensed. “The latest feedback from the board is that most of the freight forwarding industry has yet to register, and they are just waiting for the first case of non registration and compliance to come to the fore,” said Grobbelaar, “and then they’ll clamp down on the industry. “Just remember, a company which hasn’t registered and complied with the FSB demands or been licensed under a broker’s number, has been effectively breaking the law since October 1 last year (the date on which FAISA was implemented).” The question of an exemption for the industry members is no longer being addressed at the FSB. In a nutshell the clearing and freight forwarding industry is caught in the act’s web since any concern rendering financial advice or intermediary services must register and apply for a licence. “When we first heard of the act, we instituted a process of finding solutions for the industry,” Grobbelaar said. “But the fact of the matter is that FSB maintains that if you collect premiums and handle claims you are regarded as an intermediary even though it can be argued that you are merely acting as an agent.” There are only two answers now. Any company that offers advice on or collects payment for freight insurance must register as a financial services provider (FSP) – and be able to comply with all the demands for proven insurance experience amongst the “key members” in the operation, or it must obtain a mandate to offer insurance from an authorised FSP/broker. “They can register under a broker’s licence, where we’ve got a bit of leeway,” said Grobbelaar. “Being ‘fair, fit and proper’ is how they would be judged by the broker.” But, whichever the case, it’s got to be done now – or a lot of non-compliant insurance agents in the forwarding industry are going to come to legal grief.
