1. Policy
Aurora Insurance Company Limited shall at all times endeavour to comply with the regulatory requirements governing conflicts of interest, thereby ensuring that conflicts of interest are appropriately managed in the best interests of its customers.
2. Definitions
Associate
In relation to a natural person, an associate includes:
- A spouse, life partner or civil union partner
- A child, including a stepchild, adopted child or child born out of wedlock
- A parent or stepparent
- A person legally responsible for managing the affairs or care needs of that person
- The spouse or partner of any person referred to above
- A person in a commercial partnership with that person
In relation to a juristic person, an associate includes:
- Subsidiary or holding companies
- Related juristic persons with shared ownership or control
- Persons whose directions or instructions govern the board or governing body
- Trusts controlled or administered by that person
Conflict of Interest
A conflict of interest means any situation in which Aurora Insurance Company Limited, a Financial Services Provider (FSP), or a representative has an actual or potential interest that may:
- Influence the objective performance of obligations to a customer
- Prevent unbiased and fair financial services being rendered
- Prevent acting in the best interests of a customer
This includes but is not limited to:
- Financial interests that may result in gain or avoid loss at the client’s expense
- Ownership interests in another FSP, product supplier or third party
- Relationships with third parties that may affect impartiality
- Incentives favouring one client or group over another
- Receiving inducements from parties other than the client, excluding standard commissions or fees
- Any relationship that affects the ability to provide fair and unbiased services
A conflict of interest may also arise where:
- The interests of the Company are incompatible with those of an associate, service provider, third party, customer, director or responsible person
- Directors, staff or representatives derive personal benefit from official decisions or contractual relationships
Financial Interest
A financial interest includes:
- Cash or cash equivalents
- Vouchers, gifts, services or benefits
- Discounts
- Travel, hospitality or accommodation
- Sponsorships or incentives
This excludes:
- Ownership interests
- Training relating to products, legal matters, industry information or necessary technological systems, provided such training is not exclusively available to a selected group and excludes travel or accommodation
Immaterial Financial Interest
An immaterial financial interest means any financial interest with a determinable monetary value that does not exceed R1 000 in any calendar year from the same third party.
Third Party
A third party means:
- A product supplier
- Another provider
- An associate of a provider or product supplier
- A distribution channel
- Any other person providing a financial interest under an agreement
3. Mechanisms for the Identification of Conflicts of Interest
Aurora Insurance Company Limited shall identify and assess any actual or potential conflicts of interest before entering into new business relationships.
Only a Director, with approval from the Chief Executive Officer, may conclude new business on behalf of the Company.
Management is responsible for conducting annual reviews of business arrangements to assess current and potential future conflicts of interest.
The Company maintains:
- A Disclosure Notice of associated companies and shared directorships
- Registers of financial and immaterial financial interests received or paid
- A register of reported and potential conflicts of interest
4. Measures for the Avoidance and Mitigation of Conflicts of Interest
Where conflicts of interest are identified, the responsible Director and Management will consider practical measures to avoid them.
Where avoidance is not possible, Aurora Insurance Company Limited will implement measures to mitigate and manage identified conflicts in consultation with the Head of Compliance.
These measures will be documented and communicated to relevant staff members.
The Company may decline to act for a client where a conflict of interest cannot reasonably be managed.
5. Measures for the Disclosure of Conflicts of Interest
Where conflicts of interest are identified, Aurora Insurance Company Limited will make appropriate disclosures to affected parties.
Disclosures may include:
- The existence of the conflict of interest
- A description of the conflict
- Its potential impact
- Measures taken to mitigate or manage the conflict
- The affected party’s right to continue or discontinue the relationship or transaction
Aurora Insurance Company Limited will not present itself as an authorised Financial Services Provider where this is not true or operate outside authorised licence categories.
The Company will not misrepresent non-financial products as being regulated under its FAIS licence.
6. Processes, Procedures and Internal Controls
Training will be provided to Directors and staff to ensure awareness of responsibilities under this policy and compliance requirements.
7. Remuneration
Company representatives are remunerated in accordance with the Company’s Remuneration Policy.
No additional incentives are offered that may create a conflict of interest.
8. Financial Interests Received or Offered
Aurora Insurance Company Limited may only receive or offer the following financial interests from or to third parties:
- Commission permitted under applicable legislation
- Fees reasonably aligned to services rendered and authorised by law
- Fees agreed to in writing by customers for services not covered by commission
- Fees for services rendered to third parties that are reasonably aligned to the service provided
- Immaterial financial interests
- Other financial interests where fair consideration has been paid
Employees will not accept excessive financial interests from clients or third parties where such interests may create a conflict of interest.
9. Consequences of Non-Compliance
All Directors, Key Individuals, Representatives and staff are responsible for ensuring compliance with this policy.
Failure to comply with this policy may constitute serious misconduct and may result in disciplinary action.
Representatives acting contrary to this policy or regulatory requirements may be debarred in accordance with Section 14 of the FAIS Act.
10. Adoption and Approval
This Policy has been formally adopted and approved by the Board of Directors.