Regulation & compliance May 10, 2018

Member notice | PI claim trends in the FSP industry

Article by Peter Atkinson

National Technical Portfolio Manager

FIA

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We have seen a continuation of the same types of claims being made against short term insurance brokers. The number one complaint involves accusations that the broker failed to pass on relevant terms and conditions to the Insured.

For instance, important information that must be sent to an Insured could be a warranty that states that no driver under the age of 25 can drive a particular car that has just been added to an existing policy or a requirement that a tracking device be added to a vehicle.

The broker must advise the Insured in writing of these types of terms and conditions. An unrecorded telephone call will not be suffice. This sounds obvious, but you will be surprised how often this error is made. The role of an adequate record of advice cannot be overemphasised.

For long term insurance brokers, the claims are generally caused by “fat finger” errors. This is where incorrect values are inserted into application forms and the error is not picked up. This can lead to a purchase of 100 000 shares as opposed to 10 000 shares etc. If the error is not picked up timeously, the loss (in today’s topsy turvy markets) can be significant.

For a competitive PI quote please fill in this proposal form and send it back to us at taisab@pifrs.co.za

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