A 2025 High Court judgment confirmed that even where an insurer relies on an anti-churn clause to protect its policy book, urgent court relief restraining the intermediary from moving the policies will not be granted if the dispute can be resolved through arbitration within a short period and no immediate harm is shown.

In 2021, an insurance intermediary approached an insurer to take over the underwriting of its funeral policy book after a dispute arose with its previous underwriter. The insurer agreed and issued the policies once the necessary regulatory requirements had been met. The parties also entered into an intermediary agreement regulating their relationship.

In 2022, the intermediary experienced cash-flow difficulties and requested financial assistance. The insurer agreed to advance R100 million against future commission. In return, the intermediary agreed to amend the agreement to include an anti-churn clause. The clause prevented the intermediary from inducing or encouraging policyholders to move their policies to another underwriter, both during the subsistence of the agreement and after its termination.

In November 2024, the insurer became aware of a confidential letter referring to the “re-broking” of the intermediary’s funeral policy portfolio. The insurer regarded this as inconsistent with the anti-churn clause and demanded an undertaking that the intermediary would comply with its contractual obligations. The intermediary refused to give the undertaking.

After further correspondence, the parties agreed in December 2024 to refer the dispute to arbitration, as provided for in the agreement. The arbitration process commenced, pleadings were exchanged, and an arbitrator was appointed. The parties accepted that the arbitration would be concluded within three to four months and would determine the legality and enforceability of the contractual provisions.

Pending the arbitration, the insurer again requested an undertaking that the policy book would not be moved. When this was refused, the insurer approached the court on an urgent basis for an interim interdict restraining the intermediary from churning the policies.

Although the insurer had acted timeously, the court found that urgent relief was not justified. The arbitration would be finalised within a short period, the intermediary accepted that it was bound by a 90 day notice period for policy cancellations, and the transaction referred to in the confidential letter was no longer proceeding. In those circumstances, no immediate or irreparable harm was established.

The urgent application was struck off the roll. The court confirmed that where arbitration is already under way and capable of providing effective relief within a reasonable time, interim court intervention will generally not be warranted in the absence of immediate harm.

Clientelle Life Assurance Company Limited v B3 Insurance Brokers (Pty) Ltd