Chop-shop crime lives off poor

SAFETY FIRST: Cartrack SA says the number of people without car insurance in the country is staggering.
Alarming insurance industry statistics paint a serious picture of under-insurance - even no insurance - covering an estimated 40% of the 10-million cars on South Africa's roads....read more

Resort fire claims may total R500m

DEVASTATION: Home after luxury home was consumed by the unstoppable hungry flames which soared up into the sky and left row after row of dream houses looking like an abandoned ghost town...read more 

1time liquidated

As if times weren’t tough enough in the aviation insurance industry, what with highly competitive pricing and soft market conditions, 1time has filed for liquidation.

To be fair, commercial airlines place insurance in overseas markets, so the effect on local players may be limited. But still, the airline’s bankruptcy does not bode well for the economy.

On which note, hundreds of passengers have been left stranded since 15h00 today, when the airline had its final flight. It has cancelled all flights with immediate effect and a 1time executive confirmed to Fin24 that no further flights are scheduled.

The move came after the low-cost airline filed for liquidation after a final meeting with shareholders on Friday afternoon. Speaking to stranded passengers at Cape Town International Airport, it became clear to Fin24 that airline staff were unaware of the talks and the decision to file for liquidation.

“Just after three, we were all still queuing when we were told there won’t be any more flights,” one passenger told Fin24. “It’s so sad. All the staff have lost their jobs,” said the passenger.

It is unclear at the moment what will happen to staff or where ticket holders should go, as the 1time website is also down.

The Fin24 report notes that it’s uncertain how the news will impact a recent agreement with Fresh Air, the Zimbabwean-registered low-cost airline. Fresh Air was to launch its first flight on Friday, flying between OR Tambo International Airport to Victoria Falls Airport, Zimbabwe. 

The agreement between Fresh Air and 1time is recent, and involves Fresh Air using 1time aircraft to serve its route.

1time was hoping to capitalise on a bumper festive season, when margins are higher as demand increases. However, this is not to be. The airline has been under business rescue for a few months under the leadership of new CEO Blacky Komani. The airline owes various institutions, including Airports Company South Africa, about R350 million, according to the Fin24 report.

1time’s liquidation follows shortly after that of Velvet Sky.

The art of plain business language

On 13 October, linguists and language practitioners around the world celebrated International Plain Language Day. In honour of Plain Language, this article is directed at the non-linguists of the business world...read more

The coming financial collapse and how to prepare for it

This article has a few parts to it: First, a bit of shock, not only to keep you reading, but also because it could be true. Then some background where I throw around a few facts, partly to convince you that I know at least something of what I speak, but also some analysis to help make some sense of it all. Lastly, I hope to advise on what one might do about it, other than adopt the brace position....read more

Property Replacement value – digging deeper

Let’s take a closer look at the complexities of understanding the true nature of the replacement value principle.....read more

Its always good to hear positive feedback

Just want to share a really good Testimonial...read more

Are you prepared for a major catastrophe?

Hearing the siren of the fire engine as it rushes past your home on a Saturday morning prompts thoughts of where it’s going, whose house or business is burning, and the nature and scale of the danger or loss to those involved..read more

Road Accident Fund billions in the red

The Road Accident Fund (RAF) is in the red with the agency reporting a loss of R16bn....read more

Notice!!!

We have received the following useful information on crime Hotspots and Trends from the SAPS, via our Recovery Agent KVTR. 

Hatfield and Brooklyn (Pretoria)
Vehicles (mostly Toyotas) are being stolen at functions.

Fourways and Randburg area
Vehicles are being taken during housebreakings and house robberies.

Boksburg
Trucks are being taken during business robberies.

N12 freeway  Witbank, Ogies, Delmas and Bronkhorstspruit offramps
Trucks and vehicles are being pulled off by blue light gangs and then hijacked.

Industrial area  Middelburg (Mpumalanga)
Truck and trailer combinations are being stolen by a white International Eagle truck tractor operating in the said area.  Parked trailers in unguarded and open truck stops and yards are being targeted.

Kempton Park
Toyota Hilux 4X4 pickups are being stolen at rugby and other school gatherings.

N3 freeway offramp  Harrismith (Free State Province)
Truck combinations are being hijacked while the driver is sleeping on the offramp next to the freeway.

Pretoria North
Motorcycles parked outside pubs and restaurants are being stolen.

Parktown North
Luxury SUVs are being stolen, especially when parked outside homes.

Johannesburg CBD
Passenger vehicles parked in quiet roads are being stolen.

Boksburg Central
Eight-ton drop side trucks are being stolen whilst drivers draw money or visit banks.  The thieves are able to remove the tracking units within seconds.

Protect your properties

Business owners throughout South Africa are advised to protect their properties ahead of yet another winter front expected to arrive, bringing with it cold to very cold conditions rain, and snow to many parts of the country..read more

Hijacking Hotspots and Trends

We have received the following information from the SAPS, via our Recovery Agent KVTR...read more

Before you take off.

WHILE no one wants to plan their dream holiday thinking about what might go wrong, expecting the unexpected is vital when planning your holiday this summer.

With so many people sticking to strict budgets nowadays, travel insurance is often overlooked as an unnecessary add-on, but nothing could be further from the truth.....read more

Club cards and phone insurance on accounts

Often a consumer will open an account at a store with the aim of paying it off in full over six months.
As most store cards do not charge interest over a six-month period, this can be a cost-effective way to shop but only if you pay it off in full over the period. After the account is paid off the customer assumes there are no more fees to pay....read more

10 Questions to ask before hiring a financial advisor

It’s important that you find the right financial advisor to suit your needs and not settle with just anyone. You need to feel comfortable with that person because you are, after all, putting your financial future in their hands.

You shouldn’t feel intimidated when asking your financial advisor pertinent questions. In fact, your advisor should be happy that you are making these checks and feel comfortable in imparting with information about themselves and the types of products they promote.....read more

Tips on how to avoid electrical fires

WINTER hardly ever goes by without people burning down their shacks and homes due to negligence, while trying to keep themselves warm.This happens because people do not maintain the safety standards required by law when it comes to electrical connections...read more

A trail through insurance jungle

Tips on saving time and money when protecting your belongings. With our high accident and crime rate, only the foolhardy would risk not having car, household and business insurance.But although we take out insurance and fork out large sums each month, many of us do so with very little thought.....read more

KZN’s most Hijacked cars

The number of hijackings has increased up to 35 percent in the past two years in KwaZulu-Natal, the Mercury reported on Monday....read more

Make safety checks a priority this winter

With winter in full swing many households across South Africa are using appliances such as electric heaters and blankets, gas heaters and fireplace. Make safety checks a priority this winter.....read more

Car Trackers: is your car a homing pigeon or sitting duck?

We South Africans are trained like prize poodles. Even if you spend your days in pink neon spandex and sequins touring with the Boswell Wilkie Circus, there are a number of protocols most of us observe on a daily methodical basis. Cell phone and wallet are kept as close to your body as possible; a hand always covers the ATM keypad when entering a pin number; the home alarm system is activated before bed time with toilet route cordoned off for midnight bladder relief; and many more. When it comes to cars, our routines fill another whole rule book of its own. Naturally doors remain locked at all times and the unwritten permissibility of jumping dodgy stop streets at 2am is a widely used practice, especially near tall grass.....read more

Catastrophe Frequency Tests Insurers

A.M. Best Co. has released a briefing that discusses the new "normal" for the frequency of catastrophe weather events.

The insurance industry continues to be tested as catastrophic weather events have recently become more common and more severe. An uncharacteristic series of devastating natural disasters prompted 2011 to be labeled, "the year of the cat." While many are expecting catastrophe events to return to a more normalized level in 2012, it is questionable what "normal" is. In addition, it is clear insurers should prepare for the possibility that the event frequency of 2011 may be repeated.

Until 2011, tornadoes typically were not considered one of the larger risks for the insurance industry in total. But according to Munich Re, tornadoes were the costliest type of U.S. natural disaster in 2011. It had been rare for a series of tornadoes to inflict more than $1 billion in losses, but according to Swiss Re, insured losses for tornado and hail damage in the United States reached $14 billion in 2011.

The impact of 2011's increased tornado activity prompted many insurers to accelerate their pace of rate increases, reduced limits and policy exclusions. Some insurers reconsidered what risks they were willing to write and withdrew from certain climate-change challenged markets altogether.

Vehicle disrepair and third party liability

Road accidents, in most cases, are caused by fault. When this fault can firstly be attributed to the driver or owner of a vehicle, and can further be proven to be linked to the damages sustained by a third party.....read more

SA homeowners face huge loss

SA homeowners face huge loss as price gap on homes hits record high.

The price gap between building a new home and buying an existing one reached a record level at the end of 2011 following steep rises in the costs of labour and materials. As a result, an increasing number of South African homeowners may be leaving themselves exposed to huge financial loss should damage be caused to their property.

The latest housing review released by Absa showed that it was 34.5% cheaper to buy an existing home in the fourth quarter of last year than to have a new home built. This is the widest the gap has been since the survey began, beating the previous record of 33.8% 12 months earlier. According to the review, the price of building a new middle segment house rose 6.6% to R1.52 last year while the price of an existing house in this segment rose 1.8% to R1.04m.....read more

The Consumer Protection Act - 8 months later

Eight months have passed since the Consumer Protection Act was implemented on 1 April 2011. The Act ushered in many new responsibilities for South African business, not least of which being the introduction of no-fault liability in respect of products.

The knee jerk reaction from the insurance industry was a comforting, “at least most clients already have that type of cover in place”. A study was conducted by Camargue Underwriting Managers at the end of 2010 which produced startlingly, contrary results. Of the 6000 businesses in the study, less than 18% already had product liability insurance. When brokers were canvassed as to why this could be, the answers were generally:

1. The client was not in manufacturing and therefore did not require the cover
2. The client felt that the premium was too high (especially when compared to the public liability premium)
3. The client had very strict trading conditions which meant they either could not be held liable, or some other party had agreed to hold them harmless.

When one considers the statements above in the context of the pre-CPA era, it was not uncommon for retailers to refer injured parties straight to the manufacturer who often resided outside of the country, inevitably leaving the hapless consumer with little or no chance of restitution. Often hold-harmless agreements were in place between members of the supply chain and the consumer would in all probability have dropped the case after a frustrating goose chase.

The new CPA environment makes it difficult for anyone in the supply chain to avoid the issue of product liability due to the following:

1. No-fault liability applies to all members of the supply chain (suppliers, producers, retailers, distributors etc.)Further to this it is extremely difficult to contract out of liability using disclaimers and indemnities.
2. Agreements between members of the chain are of no consequence to the end consumer. A hold harmless agreement being as effective as a band aid over a gunshot wound. Joint and several liability applies to all. Some defences do exist for the supply chain members. These will be dealt with in a later article.
3. Products that have been imported by a member in the chain will invariably land in the lap of the importer as a last resort rather than back in the country of origin

So what does this mean for the Consumer Conscious business owner?

• All businesses should have product liability cover even if the product merely passes through their hands momentarily. Insurers of the various participants in the supply chain should apply a rate commensurate with the level of involvement in getting the product to market.
• Hold-harmless agreements are not totally useless as they may assist the business in seeking recourse (or the insurer in the case of subrogating) against the originator of the product. Such contracts will however not preclude the consumer from taking action against any of the supply chain members as discussed above.
• Importers of products should ensure that their suppliers have adequate global, broad liability covers as well as the possibility of having such policies extending to cover them as distributors

GOOD DECADE FOR SOUTH AFRICAN CONSUMERS

The South African consumer is among the best-protected in the world. Since 2004, financial services consumers have engaged confidently with intermediaries and product providers thanks to safeguards introduced in the Financial Advisory and Intermediary Services (FAIS) Act and its accompanying Codes of Conduct. And with the introduction of the Consumer Protection Act (CPA) Joe Average can take the fight to the supplier of just about every good or service "sold" within our borders. It comes as no surprise, therefore, that insurance companies and other financial services providers identify regulation as their top operational risk! "Every move we make these days has to be checked against upwards of 150 pieces of legislation," observed Jolandi Wassermann, Head of Legal & Policy at PPS Insurance. She was presenting at the group's Insurance Sector media presentation, held 7 February 2012.

Consumers of financial services will soon benefit from additional protections following the Financial Services Board (FSB) decision to implement Treating Customers Fairly (TCF) regulations. This regulation will ensure a higher standard of consumer protection across the financial services space. Its primary objective is to embed the fair treatment of consumers into corporate culture. There are six "fairness" outcomes embedded in the regulation to ensure the consumer gets a "fair" deal from product design to performance! "TCF applies to all FSB regulated entities," says Wassermann. It offers a fuller and more comprehensive set of consumer protections than the FAIS Act because it forces companies to reform their business practices. The regulation demands a proactive approach and encourages companies to identify problems and implement redress as early as possible. Unfortunately banks and medical schemes will fall outside the TCF regulation for now.

Banks must treat customers fairly too

The regulators will have to bring banks into the fold due to ongoing complaints about their fee structures and financial product distribution practices. Phil Billingham, a regulatory change specialist at UK-based Threesixty Services, shared the following at a recent FAnews TCF Seminar: "It is clear from UK statistics that the adviser, who accounts for around 80% of financial services product distribution, only contributes to around 1.5% of complaints. Banks meanwhile, with a mere 20% of the distribution load, were responsible for 90% of post-sales disputes." We expect a detailed analysis of post-sales financial services complaints in the domestic market would yield a similar "result".

Local financial services stakeholders can expect many regulatory changes over the next three years. National Treasury recently published their vision for the South African financial services environment in a paper titled A Safer Financial Sector to Serve South Africa Better. The so-called "Red Book" documents a series of legislative changes that South Africa will have to implement to meet undertakings given at the G20. These changes will lead to greater financial stability at an institutional level, extended consumer protection, improved access to financial services products and reductions in financial crime. South Africa will develop a "twin peaks" model under which the Reserve Bank is tasked with prudential regulation and the FSB with market conduct. As National Treasury pushes ahead with these changes, banks will eventually be drawn in.

Future consumer protections

FAIS, the CPA, the various industry ombudsman schemes and TCF are the first steps on the path to holistic consumer protection. "Apart from TCF there are a couple of other consumer protection issues that must be considered," said Wassermann. The insurance industry regulation has to "tie in" with the CPA by October 2012. Further changes to the insurance Acts are likely to be introduced throughout 2012. And all industries will soon have to comply with the Protection of Personal Information Bill too…

New by-law will place legal liability on homeowners for pool accidents

With Summer in full swing it is essential that consumers make sure they are aware of the legal and insurance implications of owning a swimming pool as new legislation will place even more onus on the owner.

This is according to Marike Stals, Legal and Compliance Manager at MUA Insurance Acceptances, who says homeowners should be aware that there are two types of cover under building insurance policies. “The first covers the actual damage of the structure, while the second is legal liability cover, where the homeowner protects themselves legally against something happening to guests, trespassers and / or their tangible property on the insured property.”

“Currently, the owner of the pool is held accountable under South African Law of Delict in the event of a drowning incident. South Africa’s civil liability laws mean a civil claim can be charged against a pool owner for any damage suffered as a result of drowning, whether fatal or not.”

Stals says internationally, pool safety laws are very strict and South Africa is following this trend. A draft ‘By-Laws for the Safe Guarding of Swimming Pools’ has also been proposed to the City of Johannesburg (COJ), which is legislation based purely around the safety-proofing of swimming pools.

“The new By-Law aims to regulate the access to swimming pools and is intended to protect members of the public from drowning. Following the promulgation of the By-Laws, anyone who wants to have a pool installed on their property must apply to the City for approval and all pools must adhere to strict rules according to the By-Law. Those who have pools in their property already will have two years to notify the council about the existence of their pools following the promulgation,” says Stals.

According to the By-Law, all pools will then have to be safe guarded in terms of the regulations. This means that all swimming pools must be maintained and fenced off and children should not be able to climb over the fence. All outdoor pools will be required to have a pool cover or must be fitted with a floating pool alarm when the pool is not in use.

“If homeowners with swimming pools do not comply with the statute in the proposed By-Law they can face criminal charges such as fines or even imprisonment. Additionally, the insurance policy will not cover the homeowner if they have not complied with the new By-Law which could potentially be a huge financial loss if the homeowner is found guilty of negligence,”