CONFLICT OF INTEREST MANAGEMENT POLICY

 

For Bidvest Insurance Limited

1. Definitions

Associate means in relation to a juristic person, which is a company, any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary. In relation to a natural person, means a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of that person; a child of that person, including adopted child and a child out of wedlock; a parent or stepparent of that person; a person in respect of which that person is recognised in law or appointed by a Court as the person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person; a person who is in a commercial partnership with that person.

BIL means Bidvest Insurance Limited, Registration number 1997/019460/06, an Authorised Financial Services Provider, FSP No 46395

Conflict of interest means any situation in which a financial services provider or a representative has an actual or potential interest that may, in rendering a financial service to a client:

  • influence the objective performance of his, her or its obligations to that client; or
  • prevent a financial services provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interest of that client,

Including but not limited to: –

  • a financial interest;
  • an ownership interest;
  • any relationship with a Third Party.

Distribution channel means any arrangement between a product supplier or any of its associates and one or more providers or any of its associates in terms of which arrangement any support or service is provided to the provider or providers in rendering a financial service to a client; any arrangement between two or more providers or any of their associates, which arrangement facilitates, supports or enhances a relationship between the provider or providers and a product supplier; any arrangement between two or more product suppliers.

Employees mean internal members of staff, including contractors of BIL.

Financial interest means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, incentive, or valuable consideration, other than –

  • an ownership interest;
  • training, that is not exclusively available to a selected group of financial services providers or representatives, on –
  • products and legal matters relating to those products;
  • general financial and industry information;
  • specialised technological systems of a Third Party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training.

Fair Value has the meaning assigned to it in the financial reporting standards adopted or issued under the Companies Act, 1973 (Act No. 61 of 1973).

FAIS Act means the Financial Advisory and Intermediary Services Act, No 37 of 2002, as amended.

Financial Services Provider means any person, other than a representative, who as a regular feature of the business of such person –

  • furnishes advice; or
  • furnishes advice and renders any intermediary service; or
  • renders an intermediary service.

FSCA means the Financial Sector Conduct Authority, a regulatory body established in terms of the Financial Sector Regulation Act, Act 9 of 2017, or its predecessor, the Financial Services Board, established in terms of the Financial Services Board Act, Act 97 of 1990.

Holding Company means a holding company as defined in section 1(4) of the Companies Act, 1973 (Act No. 61 of 1973).

Immaterial financial interest means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1000 in any calendar year from the same Third Party in that calendar year received by –

  • a financial services provider, who is a sole proprietor;
  • a representative for that representative’s direct benefit;
  • a financial services provider, who for its benefit or that of some, or all its representatives, aggregates the immaterial financial interest paid to its representatives.

Ownership interest means

  • any equity or ownership interest, for which fair value was paid by the owner, other than equity or an ownership interest held as an approved nominee on behalf of another person; and
  • includes any dividend, profit share or similar benefit derived from that equity or ownership interest.

Representative means any person who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandatory agreement, but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity, which service-

  • does not require judgment on the part of the latter person; or
  • does not lead a client to any transaction in respect of a financial product in response to general enquiries.

Responsible Persons means Directors, (including Non-Executive Directors), Managing Executive (including senior management), Heads of Control Functions and a significant owner of shares or financial interest in BIL.

Subsidiary means a subsidiary as defined in section 1(3) of the Companies Act, 1973 (Act No. 61 of 1973).

Third Party means

  • a product supplier;
  • another financial services provider;
  • an associate of a product supplier or a financial services provider;
  • a distribution channel; or

any person who in terms of an agreement or arrangement with a person who provides a financial interest to a financial services provider or its representatives.

2. The Regulatory basis for this policy

Board Notice 58 of 2010, as issued by the FSCA in terms of the FAIS Act, sets out various Conflict of Interest management requirements. These provisions apply to all authorized financial services providers who are required to adopt a Conflict of Interest Management Policy which caters for measures to identify, avoid and/or mitigate actual and potential conflicts of interest.
It is the responsibility of all Responsible Persons and Employees of BIL to comply with this policy proactively, and in good faith, declare an actual or potential conflict of interest, and to seek advice in cases of uncertainty.

3. Identification of conflict of interest

BIL employs the following mechanisms to ensure that all conflicts are identified:

3.1 Before a new business arrangement is concluded, consideration is given to whether the proposed arrangement will present any potential conflict of interest.

3.2 The Managing Director and Financial Director sign off all agreements which are pre-vetted by the Legal Department and monitored for performance on an ongoing basis by the Legal Department in conjunction with the Heads of Department to which such contract pertains to ensure that these contracts and relationships influence BIL’s: –

  • objective performance towards its clients
  • ability to render fair and unbiased financial services toward its clients
  • ability to act in the best interest of the client.

3.3 All Representatives are responsible for identifying instances of conflict of interest and are required to notify their Business Unit Manager and/or the Financial Director of any conflicts they become aware of.

4. Avoidance and mitigation of conflict of interest

Once a conflict of interest has been identified it should be appropriately and adequately managed. The Business Unit Manager and Manager responsible for the affected area will consider whether any practical means exists for avoiding such conflict of interest. Where this is not practical, the Business Unit Manager will consult with the Managing Director and Financial Director to devise appropriate and adequate measures to mitigate and manage the identified conflict of interest.

The resulting mitigating and managing measures will be documented and communicated to all staff involved in managing the relationship to ensure that the risk of the identified conflict of interest is appropriately managed and does not recur.

Refer to the diagrammatic representation in Annexure A.

BIL has various internal policies to manage and mitigate conflicts of interest. These internal policies govern the ethical conduct of Responsible Persons and Employees in the following manner:

Code of Ethics: Ethical conduct for Responsible Persons, Representatives and other Employees:

  • The Code of Ethics is accepted and signed by all Responsible Persons and Employees of BIL upon engagement;
  • Employees and Responsible Persons must maintain integrity in their dealings with customers and suppliers;
  • Employees and Responsible Persons must avoid any activities that may lead to an actual or perceived conflict of interest within the business of BIL;
  • In accepting business or entering contracts, Responsible Persons must observe the highest standards of integrity and act in the best interests of the company and the customer;
  • Employees and Responsible Persons may neither support nor solicit loans, gifts in cash or in kind, free-of-charge services or any other favours from any current or prospective business partner;
  • Employees and Responsible Persons must not deliberately give inadequate or misleading descriptions of products, services; and
  • Employees and Responsible Persons must maintain the confidentiality of information received from insurers, customers, suppliers and intermediaries.

Gift policy:

  • The provision or acceptance of gifts and corporate hospitality by an Employee is acceptable provided that any such gift or hospitality received does not exceed the maximum of R1 000 per year from any one insurer, as stipulated in Board Notice 58 of 2010;
  • As required by the Code of Ethics of BIL, individual gifts with a monetary value in excess of R200 are to be recorded in the Gift Register for all employees.
  • All gifts received by a Representative are to be recorded in a separate Gifts Register for Representatives which is maintained by the Compliance Department.

5. Disclosure of conflicts of interest

BIL or a Representative will, in writing, at the earliest reasonable opportunity disclose to a client any potential conflict of interest in respect of that client. The disclosure must include:

  • The existence of the conflict of interest;
  • A description of what the conflict is;
  • Its impact;
  • The measures taken to mitigate and manage it; and
  • The customer’s free choice whether he/she wishes to continue with procuring the product.

The onus is on Responsible Persons and Representatives who are subject to this policy to ensure that proper disclosure is made in respect of a conflict of interest, despite this being contained in the product fulfilment documentation.

6. Processes, procedures and internal controls to facilitate compliance

The Executive Management of BIL must ensure that the policy is implemented.

Training for all affected staff will be provided by the Compliance Department to ensure that they understand their responsibilities under this policy.

BIL Management and the Compliance Department will monitor compliance with this policy and will perform the necessary reviews in consultation with Executive Management to ensure that effective and appropriate procedures and processes are in place in order to comply with the policy.

BIL Management in conjunction with the Compliance Department will facilitate an annual review of this policy to ensure that it remains relevant and appropriate to meet the statutory requirements.

7. Financial interests offered to Representatives

BIL may offer sales incentives to its Representatives, in addition to their basic salary, based upon a combination of:

  • The quantity of the business introduced and the achieving of set targets; and
  • The quality of the services rendered to customers (as measured by the BIL Quality Assurance process).

8. Financial interest offered by BIL to third parties

BIL may only offer the following financial interests to third parties:

  • Commission authorised under the Short-term Insurance Act;
  • Fees that are reasonably commensurate with the service being rendered and authorised under the Short-term Insurance Act;
  • Fees for rendering a financial service in respect of which no commission or fees are paid, if those fees are specifically agreed to in writing by the client and may be discontinued at the discretion of the client;
  • Fees or remuneration for the rendering of a service by a Third Party, which fees or remuneration are reasonably commensurate to the service being rendered;
  • Any immaterial financial interest as defined in the FAIS General Code of Conduct; and
  • Any other financial interest, for which consideration that is reasonably commensurate with the value of the financial interest, is paid by BIL or a Representative at the time of receipt thereof.

9. List of Associates of BIL

A list of Associates is available on request at the registered office of BIL.

10. Third parties in which BIL holds an ownership interest

BIL does not hold any ownership interest in third parties.

11. Third parties who hold an ownership interest in BIL

BIL is a wholly-owned subsidiary of Bidvest Insurance Limited, a non-operating holding company which is, in turn wholly owned by The Bidvest Group Limited.

12. Consequences of non-compliance with the policy

The Conflict of Interest Policy is provided to all Representatives and Employees. All Representatives and staff are required to read this policy and sign a statement confirming that they have read and fully understood the provisions of the policy and the application thereof.

Failure to comply with the provisions of this policy by any Representative or staff shall constitute serious misconduct and will result in disciplinary action being initiated against them. Avoidance, limitation or circumvention of this policy will be deemed serious non-compliance.

13. Policy Review

The policy is subject to regular review and approval by the Boards of Directors of BIL. Any proposed interim changes must be approved by the Executive committee of BIL after recommendation from the Compliance Department.

Annexure A

Untitled-1

CONFLICT OF INTEREST MANAGEMENT POLICY

For Bidvest Insurance Brokers (Pty) Ltd

14. Definitions

Associate means in relation to a juristic person, which is a company, any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary. In relation to a natural person, means a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of that person; a child of that person, including adopted child and a child out of wedlock; a parent or stepparent of that person; a person in respect of which that person is recognised in law or appointed by a Court as the person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person; a person who is in a commercial partnership with that person.

BIB means Bidvest Insurance Brokers (Pty) Limited, Registration number 1967/000378/07, an Authorised Financial Services Provider, FSP No 44446.

Conflict of interest means any situation in which a financial services provider or a representative has an actual or potential interest that may, in rendering a financial service to a client:

  • influence the objective performance of his, her or its obligations to that client; or
  • prevent a financial services provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interest of that client,

Including but not limited to:-

  • a financial interest;
  • an ownership interest;
  • any relationship with a Third Party.

Distribution channel means any arrangement between a product supplier or any of its associates and one or more providers or any of its associates in terms of which arrangement any support or service is provided to the provider or providers in rendering a financial service to a client; any arrangement between two or more providers or any of their associates, which arrangement facilitates, supports or enhances a relationship between the provider or providers and a product supplier; any arrangement between two or more product suppliers.

Employees mean internal members of staff, including contractors of BIB.

Financial interest means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, incentive, or valuable consideration, other than –

  • an ownership interest;
  • training, that is not exclusively available to a selected group of financial services providers or representatives, on –
  • products and legal matters relating to those products;
  • general financial and industry information;
  • specialised technological systems of a Third Party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training.

Fair Value has the meaning assigned to it in the financial reporting standards adopted or issued under the Companies Act, 1973 (Act No. 61 of 1973).

FAIS Act means the Financial Advisory and Intermediary Services Act, No 37 of 2002, as amended.

Financial Services Provider means any person, other than a representative, who as a regular feature of the business of such person –

  • furnishes advice; or
  • furnishes advice and renders any intermediary service; or
  • renders an intermediary service.

FSCA means the Financial Sector Conduct Authority, a regulatory body established in terms of the Financial Sector Regulation Act, Act 9 of 2017, or its predecessor, the Financial Services Board, established in terms of the Financial Services Board Act, Act 97 of 1990.

Holding Company means a holding company as defined in section 1(4) of the Companies Act, 1973 (Act No. 61 of 1973).

Immaterial financial interest

means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1000 in any calendar year from the same Third Party in that calendar year received by –

  • a financial services provider, who is a sole proprietor;
  • a representative for that representative’s direct benefit;
  • a financial services provider, who for its benefit or that of some, or all its representatives, aggregates the immaterial financial interest paid to its representatives.

Ownership interest means

  • any equity or ownership interest, for which fair value was paid by the owner, other than equity or an ownership interest held as an approved nominee on behalf of another person; and
  • includes any dividend, profit share or similar benefit derived from that equity or ownership interest.

Representative means any person who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandatory agreement, but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity, which service-

  • does not require judgment on the part of the latter person; or
  • does not lead a client to any transaction in respect of a financial product in response to general enquiries.

Responsible Persons means Directors, (including Non-Executive Directors), Managing Executive (including senior management), Heads of Control Functions and a significant owner of shares or financial interest in BIB.

Subsidiary means a subsidiary as defined in section 1(3) of the Companies Act, 1973 (Act No. 61 of 1973).

Third Party means

  • a product supplier;
  • another financial services provider;
  • an associate of a product supplier or a financial services provider;
  • a distribution channel; or
    any person who in terms of an agreement or arrangement with a person who provides a financial interest to a financial services provider or its representatives.

15. The Regulatory basis for this policy

Board Notice 58 of 2010, as issued by the FSCA in terms of the FAIS Act, sets out various Conflict of Interest management requirements. These provisions apply to all authorized financial services providers who are required to adopt a Conflict of Interest Management Policy which caters for measures to identify, avoid and/or mitigate actual and potential conflicts of interest.
It is the responsibility of all Responsible Persons and Employees of BIB to comply with this policy proactively, and in good faith, declare an actual or potential conflict of interest, and to seek advice in cases of uncertainty.

16. Identification of conflict of interest

BIB employs the following mechanisms to ensure that all conflicts are identified:

16.1 Before a new business arrangement is concluded, consideration is given to whether the proposed arrangement will present any potential conflict of interest.

16.2 The Managing Director and Financial Director sign off all agreements which are pre-vetted by the Legal Department and monitored for performance on an ongoing basis by the Legal Department in conjunction with the Heads of Department to which such contract pertains to ensure that these contracts and relationships influence BIB’s:-

  • objective performance towards its clients
  • ability to render fair and unbiased financial services toward its clients
  • ability to act in the best interest of the client.

16.3 All Representatives are responsible for identifying instances of conflict of interest and are required to notify their Business Unit Manager and/or the Financial Director of any conflicts they become aware of.

17. Avoidance and mitigation of conflict of interest

Once a conflict of interest has been identified it should be appropriately and adequately managed. The Business Unit Manager and Manager responsible for the affected area will consider whether any practical means exists for avoiding such conflict of interest. Where this is not practical, the Business Unit Manager will consult with the Managing Director and Financial Director to devise appropriate and adequate measures to mitigate and manage the identified conflict of interest.

The resulting mitigating and managing measures will be documented and communicated to all staff involved in managing the relationship to ensure that the risk of the identified conflict of interest is appropriately managed and does not recur.

Refer to the diagrammatic representation in Annexure A.

BIB has various internal policies to manage and mitigate conflicts of interest. These internal policies govern the ethical conduct of Responsible Persons and Employees in the following manner:

Code of Ethics: Ethical conduct for Responsible Persons, Representatives and other Employees:

  • The Code of Ethics is accepted and signed by all Responsible Persons and Employees of BIB upon engagement;
  • Employees and Responsible Persons must maintain integrity in their dealings with customers and suppliers;
  • Employees and Responsible Persons must avoid any activities that may lead to an actual or perceived conflict of interest within the business of BIB;
  • In accepting business or entering contracts, Responsible Persons must observe the highest standards of integrity and act in the best interests of the company and the customer;
  • Employees and Responsible Persons may neither support nor solicit loans, gifts in cash or in kind, free-of-charge services or any other favours from any current or prospective business partner;
  • Employees and Responsible Persons must not deliberately give inadequate or misleading descriptions of products, services; and
  • Employees and Responsible Persons must maintain the confidentiality of information received from insurers, customers, suppliers and intermediaries.

Gift policy:

  • The provision or acceptance of gifts and corporate hospitality by an Employee is acceptable provided that any such gift or hospitality received does not exceed the maximum of R1 000 per year from any one insurer, as stipulated in Board Notice 58 of 2010;
  • As required by the Code of Ethics of BIB, individual gifts with a monetary value in excess of R200 are to be recorded in the Gift Register for all employees.
  • All gifts received by a Representative are to be recorded in a separate Gifts Register for Representatives which is maintained by the Compliance Department.

18. Disclosure of conflicts of interest

BIB or a Representative will, in writing, at the earliest reasonable opportunity disclose to a client any potential conflict of interest in respect of that client. The disclosure must include:

  • The existence of the conflict of interest;
  • A description of what the conflict is;
  • Its impact;
  • The measures taken to mitigate and manage it; and
  • The customer’s free choice whether he/she wishes to continue with procuring the product.

The onus is on Responsible Persons and Representatives who are subject to this policy to ensure that proper disclosure is made in respect of a conflict of interest, despite this being contained in the product fulfilment documentation.

19. Processes, procedures and internal controls to facilitate compliance

The Executive Management of BIB must ensure that the policy is implemented.

Training for all affected staff will be provided by the Compliance Department to ensure that they understand their responsibilities under this policy.

BIB Management and the Compliance Department will monitor compliance with this policy and will perform the necessary reviews in consultation with Executive Management to ensure that effective and appropriate procedures and processes are in place in order to comply with the policy.

BIB Management in conjunction with the Compliance Department will facilitate an annual review of this policy to ensure that it remains relevant and appropriate to meet the statutory requirements.

20. Financial interests offered to Representatives

BIB may offer sales incentives to its Representatives, in addition to their basic salary, based upon a combination of:

  • The quantity of the business introduced and the achieving of set targets; and
  • The quality of the services rendered to customers (as measured by the BIB Quality Assurance process).

21. Financial interest offered by BIB to third parties

BIB may only offer the following financial interests to third parties:

  • Commission authorised under the Short-term Insurance Act;
  • Fees that are reasonably commensurate with the service being rendered and authorised under the Short-term Insurance Act;
  • Fees for rendering a financial service in respect of which no commission or fees are paid, if those fees are specifically agreed to in writing by the client and may be discontinued at the discretion of the client;
  • Fees or remuneration for the rendering of a service by a Third Party, which fees or remuneration are reasonably commensurate to the service being rendered;
  • Any immaterial financial interest as defined in the FAIS General Code of Conduct; and
  • Any other financial interest, for which consideration that is reasonably commensurate with the value of the financial interest, is paid by BIB or a Representative at the time of receipt thereof.

22. List of Associates of BIB

A list of Associates is available on request at the registered office of BIB.

23. Third parties in which BIB holds an ownership interest

BIB does not hold any ownership interest in third parties.

24. Third parties who hold an ownership interest in BIB

BIB is a wholly-owned subsidiary of Bidvest Insurance Group (Pty) Ltd, a non-operating holding company which is, in turn wholly owned by The Bidvest Group Limited.

25. Consequences of non-compliance with the policy

The Conflict of Interest Policy is provided to all Representatives and Employees. All Representatives and staff are required to read this policy and sign a statement confirming that they have read and fully understood the provisions of the policy and the application thereof.

Failure to comply with the provisions of this policy by any Representative or staff shall constitute serious misconduct and will result in disciplinary action being initiated against them. Avoidance, limitation or circumvention of this policy will be deemed serious non-compliance.

26. Policy Review

The policy is subject to regular review and approval by the Boards of Directors of BIB. Any proposed interim changes must be approved by the Executive committee of BIB after recommendation from the Compliance Department.

Annexure A

Untitled-1