Subject Title - INSETA

8.8.3 Insurance 89One of the risks for consumers in the provision of financial services in relationto the FAIS defined financial products is the recourse they have when the FSPfails in one way or another.Will they get their investment money back if there was product or institutionfailure? The General Code 90 states that the Registrar may require providers tohave suitable guarantees, professional indemnity or fidelity insurance coverin place. The General Code was amended in September 2009 to require (forproviders excluding representatives) specific cover for professional indemnityand fidelity insurance.New FSPs (authorised after 21 September 2009) must comply with theinsurance requirements within six (6) weeks of authorisation.The following is a summary of the insurance cover requirements, effectivefrom 21 September 2009.WHO? BY WHEN? WHAT?Category I or IV provider 91who does not receive orBY21 SEPTEMBERhave in force, in respect ofthe clients:hold clients‟ financial 2010 suitable guarantees of aproducts or funds onminimum R1 million ORbehalf of clients on 21 suitable professionalSeptember 2009 MUSTindemnity cover of aminimum of R1 million.Category I or IV provider 92who does receive or holdBY21 SEPTEMBERhave in force, in respect ofthe clients:clients‟ financial products 2010 suitable guarantees of aor funds on behalf ofminimum R1 million ORclients on 21 September suitable professional2009 MUSTindemnity and fidelityinsurance cover of aminimum amount of R1million.89 Section 13 of the General Code90 Section 13 of the General Code91 Section 3(a) of BN 123 of 200992 Section 3(b) of BN 123 of 2009158 © INSETA - Section 1 12a