New Act will impact on marine insurance industry

Joint delegation seeks solutions for c&f industry OCTOBER 1 is D-day for the implementation of the Financial Advisory and Intermediary Services Act (FAISA) which requires financial advisers and intermediary service providers to become registered and licensed. Prestmarine International and members of the SA Association of Freight Forwarders (SAAFF) met the Financial Services Board (FSB) last week regarding the implementation of the Act which has implications for clearing and forwarding agents. In a nutshell the clearing and freight forwarding industry is caught in its web since any concern rendering financial advice or intermediary services must register and apply for a licence. “We are in the process of finding solutions for the industry 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,” says Riaan Grobbelaar, managing director of Prestmarine. The FSB has stated that if c&f agents are not licensed by October 1, 2004 they will not be allowed to offer marine insurance as a service to their clients. “We in the insurance industry were ready for it,” said Grobbelaar, “but we didn’t think it would spread as wide as the forwarding industry.” Or, for that matter, he added, funeral directors, travel agents etc - which, amongst other service sectors, also fall within the scope of the Act. Attempts from Prestmarine’s side to get the industry exempted from the Act have not been successful so far. At the last meeting, a joint approach to the FSB with SAAFF representatives, the conclusion was that the industry will have to register in some or other form. “With all the information now available, SAAFF will convene meetings on the subject and we will work closely with them to find solutions,”, Grobbelaar added. A “roadshow” on the FAIS Act and the implications for the clearing and forwarding industry is planned for the various regions together with SAAFF. SAAFF representative, Keith Johnstone, who was at the FSB meeting with Edward Little stated: “The industry members can’t just go on pleading that they’re only agents. They must measure up to certain international standards.” But Johnstone reserved other comments till later - promising to send FTW a full statement as soon as it has been prepared.