An intermediary for the purposes of the FAIS Act and the Short-term Insurance Act is someone who acts as a go-between interposed between a client and product supplier whose acts directly result in a financial transaction, for instance a policy, being entered into.  That means that someone supplying leads that may indirectly result in a policy being taken up is not an intermediary limited by the commission regulations nor requiring accreditation under the FAIS Act.

The finding by the supreme court of appeal in Tristar Investments v The Chemical Industries National Provident Fund reflects what the Registrar of Short-term Insurance has said about the meaning of the phrase “rendering services as intermediary” since the Short-term Insurance Act came into force.

Someone supplying leads that may indirectly result in a policy being taken up is not an intermediary limited by the commission regulations nor requiring accreditation under the FAIS Act

In ordinary language an intermediary is a person who intermediates between two parties to bring about an agreement between them.  That is why, for instance, issuing policy documents may be an outsource function rather than an intermediary service or financial service under the FAIS Act.

That doesn’t mean that remuneration for providing leads is open-ended.  If financial institutions outsource the function of finding potential customers, that is an outsource service and the remuneration for providing the service must be reasonable.  The service must also be carried out independently of any intermediary or financial service and must not be used as a way of supplementing regulated intermediary earnings.