FINANCIAL SERVICES PROVIDERS LIABILITY INSURANCE APPLICATION Please complete the attached form and note the following:- 1. Our minimum limit of indemnity is R1,000,000 2. Our minimum deductible (excess / first amount payable) is R10,000 3. Fidelity Guarantee and Dishonesty of Staff is for Employees only you only complete the Fidelity Questionnaire on page 4 if you require this cover, otherwise, if you tick No at question 4 a) and b), you don t have to complete page 4. 4. Retroactive cover we can provide up to 3 years retroactive cover if no cover has been in force. If you have had uninterrupted cover, please send us the proof of your existing insurance. 5. Please complete question 6, DO NOT LEAVE BLANK, as we will not quote. The figure must include all expected ANNUAL Commission and Fees from Business activities listed in question 6 a). 6. LIST ALL YOUR BUSINESS ACTIVITIES, to ensure you are properly quoted. 7. Binding Authorities are applicable to Short term brokers only. Only if you have a binding/underwriting authority, complete pages 4 & 5. Thus, if you have selected No at question 8, you do not have to complete these pages. SCOPE OF COVERAGE: PROFESSIONAL INDEMNITY FOR FSP S There are three options that clients may wish to receive quotations in respect of. These are:- Option A - Professional Indemnity - Defamation - Loss of Documents - Breach of Duty - Legal Defence Costs - Legal Liability following Staff Dishonesty - Fidelity Guarantee 1
Option B - Professional Indemnity - Defamation - Loss of Documents - Breach of Duty - Legal Defence Costs - Legal Liability following Staff Dishonesty Option C - Professional Indemnity - Defamation - Loss of Documents - Breach of Duty - Legal Defence Costs IN ESSENCE: OPTION A HAS FULL DISHONESTY COVER Legal Liability to Third Parties following Staff Dishonesty and Fidelity Guarantee OPTION B HAS ONLY LIMITED DISHONESTY COVER Legal Liability to Third Parties following Staff Dishonesty OPTION C HAS NO DISHONESTY COVER AT ALL Nicole Kern Southern Cross Risk Management (Pty) Ltd Reg No: 2003/031785/07 Authorised FSP License No: 14874 Tel: 011 781 9916 Fax: 086 619 4634 Unit 44 Sandton View Office Park, Conduit Street, Lyme Park, Randburg P O Box 3104, Pinegowrie, 2123 Email : underwriting@southerncrossrm.co.za 2
FINANCIAL SERVICE PROVIDERS LIABILITY INSURANCE APPLICATION IF A POLICY IS ISSUED, IT WILL BE ON A CLAIMS MADE BASIS NOTICE: THE POLICY PROVIDES THAT THE LIMITS OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENCE. FURTHER NOTE THAT AMOUNTS INCURRED FOR LEGAL DEFENCE SHALL BE APPLIED AGAINST THE DEDUCTIBLE AMOUNT. 1. Name of Practice Registration Number Year Established VAT Number FSP Licence No: Contact Person Physical Address Postal Address Tel No Fax No E-mail Cell No 2. Limit of Indemnity Required R / R 3. Deductible Required R / R 4. Please tick where required in order to include in our quotation: a. Fidelity Guarantee YES NO b. Legal Liability following Employee Dishonesty YES NO c. 1 x Reinstatement (Included) d. Retroactive Cover (if no previous cover was in force) i. 1 year YES NO ii. 2 years iii. 3 years YES NO YES NO e. ARE YOU A CATEGORY II LICENSE HOLDER YES NO 3
5. Please give the approximate percentage breakdown of the total of your premium volume and fees as: AGENT % BROKER % MANAGING GENERAL AGENCY % REINSURANCE INTERMEDIARY % RISK MANAGER (FOR FEE) % T/P ADMINISTRATOR (FOR FEE) % OTHER (EXPLAIN) % TOTAL 100% Financial Year End Date 6. Annual Income/Fees/Commissions earned Last Financial Year Current Financial Year R R a) Breakdown of Business Activity BUSINESS ACTIVITY APPLICABLE PERCENTAGE Life and Pensions Yes No Investment Advice Yes No Property Syndication Yes No i.e. Sharemax, PICVest and the like Personal Lines Yes No Commercial Lines Yes No Marine Yes No Aviation Yes No Reinsurance Contracts Yes No Mortgage Broking Yes No Building Society Agency Yes No Other (Explain) Yes No TOTAL 100% b) Please state the extent of any investments made or recommended to clients in property syndications of any nature whatsoever c) Have you advised or intermediated on any products or investments related to the Relative Value Arbitrage Fund (RVAF), SA Superalloys, Asarja (Pty) Ltd, Basileus Capital (Pty) Ltd, or any other products or investments related to Herman Pretorius, Julius Willaims or any of their associates Yes No If you answered yes, please elaborate and advise of value of funds, number of clients and any other pertinent information relating to the above. 4
7. Please provide the following: NAMES IN FULL OF ALL PARTNERS / DIRECTORS / PROFESSIONAL QUALIFICATIONS FAIS COMPLIANT Y/N EMPLOYEE DETAILS Directors / Principals / Partners Professional Administration Other No. of Staff Are all representatives FAIS compliant? 8. Do you have any binding authority or similar agreements? Yes No If yes, please complete the supplementary questionnaire below. 9. Give the territory of operation other than South Africa : list by State and country Give the premium volume by class of business written outside RSA 10. Please complete the following regarding the applicant s professional liability insurance for the past three years: INSURER LIMIT DEDUCTIBLE PERIOD PREMIUM Has any prospective Insured ever had his/her license revoked or suspended or been fined or disciplined in any way? Yes No If yes, attach a supplemental page with details Has any claims been made by the proposer or any of its predecessors in business, had their license or professional membership revoked or suspended or been fined or disciplined in any way, during the past five years? Yes No If yes, please describe the incident which caused the claim, the date it occurred, the amount of reserve or indemnity paid and estimated expenses paid as respects the claim. Attach a separate page giving this information. It is agreed that claims made prior to the inception of the policy period are excluded from this proposed coverage 5
Does any prospective Insured have knowledge or information of any circumstances or any allegations or contentions of any incident which may result in any claim being made against the applicant or any of its past or present partners, directors, employees or any predecessors in business? Yes No Including Sharemax, PIC Vest and other similar property syndications Please confirm whether you are a registered FSP with the FSB in terms of FAIS. If not please explain why Yes No Has any application to the FSB per above ever been declined? If so, please explain Yes No DECLARATION We hereby declare that the above statements are be true and confirm that we have not misled or misinformed underwriters of any material facts, and agree that this proposal form shall the basis of the insurance contract. NAME: DATE: TITLE/POSITION: SIGNATURE: 6
Employee Fidelity Supplementary Questionnaire 1. Does the Company segregate duties so that no one employee (excluding directors) can control any of the following activities from commencement to completion without referral to others? a. Signing Cheques or Authorising Payments above R5,000 _ Yes _ No b. Issuing Funds Transfer Instructions _ Yes _ No c. Investment in & Custody of Securities &/or Valuables _ Yes _ No d. Refund of Monies or Return of Goods above R5,000 _ Yes _ No e. Reconciling Bank Statements _ Yes _ No 2. Is there Controlled / Password Access to all Locations? _ Yes _ No 3. Is there Controlled / Password Access to all Computer Terminals? _ Yes _ No 4. Are Wages/Salaries checked against Personnel Records on a Monthly or Quarterly basis for Unusual or Excessive Payments? _ Yes _ No 5. Does the Company ensure that all staff take 2 Weeks Uninterrupted Annual Leave at least Once a Year? _ Yes _ No NOTE: Fidelity cover is for employees only 7
Binding Authorities Questionnaire Binding Authority 1. Please provide the following details: (a) Name of Insurer(s) who grants the Binding Authority (b) The specific class of business to which the Binding Authority relates to (i.e. motor, household, public liability etc.) (c) What is the maximum limit permitted under the Binding Authority? (d) Please advise the total premium and commission income as indicated below: Total Premium Income Total Commission Income Current Year R R Previous Year R R Estimate for next year R R 3. (a) Is the Binding Authority in written form?... Yes No (b) Is the Binding Authority for an annual period with a specified renewal date? Yes No If no please provide details: (c) Does the Binding Authority specify those individuals who have authority under the agreement? Yes No If no, do you restrict who has authority under the Binding Authority to senior staff only with a minimum of three years insurance experience?... Yes No If no please advise how do you ensure that the terms of the Binding Authority are not breached? (d) (e) Does the Binding Authority state that the Insurer(s) will hold you harmless in respect of any error you make in the operation of the Binding Authority?... Yes No Does the Binding Authority state that you will indemnify the Insurer(s) in respect of any error you make in the operation of the Binding Authority?... Yes No (f) Do you delegate the Binding Authority to any other party?... Yes No 8
4. Does the Binding Authority restrict the territory to which business can be accepted to the UK only? Yes No If no, please provide full details of those territories from which the business can be accepted: 5. Is the Binding Authority: (Please choose one of the following options) (a) (b) (c) (d) Non-discretionary with no deviation from the Binding Authority in respect of the type of risks, the rates, the period of insurance or the policy wording applicable, as specified in the Binding Authority Yes No Non-discretionary with no deviation from the Binding Authority in respect of the type of risk, the period of insurance or policy wording applicable but with a limited amount of deviation permissible to the extent of discounts or loadings specifically outlined within the Binding Authority? Yes No Non-discretionary with no deviation from the Binding Authority in respect of the type of risk and wording applicable but deviation permissible in respect of the period of insurance or non-specified discounts or loadings... Yes No Discretionary Binding Authority with no limits in respect of the type of risk, relating, wording or the period of insurance?... Yes No 6. Do you place reinsurance in respect of the Binding Authority?... Yes No 7. Do you have a claims handling authority/ settlement authority?... Yes No If yes, what is the financial limit of the authority? 9