The National Treasury (NT) and Financial Services Board (FSB) requested public comment for the proposed amendments to
Insurance Binder Regulations issued under the Short-term and Long-term Insurance Acts published in Government
Gazette No. 37805. The proposal to allow the Registrar to determine fees, in particular, could have serious repercussions
for the industry. If introduced, the current practice of determining binder fees as a percentage of the premium will be
replaced by prescribed fees which, in the registrar’s opinion, are fair reward for the performance of the binder functions.
Have you consider the possibility of the commission being capped? At 15% for non-motor and 7.5% for motor? If true,
you can lose between 20% and 30% of your brokerages resale value. No matter the size of your brokerage,
selling in the future will result in you losing value.
What is next for my business?
Yes the FSB can, they are busy with new regulations.
Binder fees are again being regulated and this time it will be capped per function and in total. What is the allowed amount per function? But I do so much more for my clients? I have infrastructure cost? I have salaries to pay? My brokerage is one of my biggest assets, and with the regulation I will not be able to sell it for as much!
This is only the beginning
For a while the charges like debit order fee, policy fee, risk management fee has been under scrutiny. Clients need to be advised of the reason for the fee, and sign off on the fee. Will the fee be regulated or even disappear?
Binder / Policy fee / Commission
Commission is the next step. Market rumors are that commission percentages are going to change by as much as 5% for Non - Motor.more info