<p> SECTION: 3</p><p>Short-term Insurance Act, 53 of 1998</p><p>TABLE OF CONTENTS</p><p>Content Page</p><p>Section 3 Short-term Insurance Act, 53 of 1998 19</p><p>Overview 21</p><p>Assisting the Learners with this Section 22</p><p>20 Version: 02/2004 IB CP 5 CG Overview</p><p>Learning Outcome The following is the Learning Outcome of this Section:</p><p>3. Examine Critical Sections of the Short-term Insurance Act, 53 of 1998.</p><p>Learning The Learning Objectives are as follows: Objectives On completion of this Section, the Learner must be able to:</p><p>3. Examine critical Sections of the Short-term Insurance Act, 53 of 1998 by:</p><p> Realising the purpose and nature of the Act</p><p> Conceptualising the capacity to conclude a Short-term Insurance Contract</p><p> Having insight into the sound business practices for Short- term Insurance</p><p> Comprehending Policyholder Protection Rules</p><p> Conceptualising Special Short-term Risk Insurance</p><p>Assessment To demonstrate the achievement of the Learning Objectives, Learners are Criteria required to meet the criteria and/or provide the following evidence:</p><p>Realising the purpose and nature of the Act  Describe the purpose of the Act  Define a Short-term Policy</p><p>Conceptualising the capacity to conclude a Short-term Insurance Contract  Describe the capacity to conclude a Short-term Insurance Policy</p><p>Having insight into the sound business practices for Short-term Insurance  Explain Section 43 of the Act  Identify business practices covered in the Act</p><p>Comprehending Policyholder Protection Rules  Describe the purpose of the Policyholder Protection Rules</p><p>Conceptualising Special Short-term Risk Insurance  Describe the purpose of SASRIA  Identify what is covered and not covered under SASRIA</p><p>21 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>3.1 Assisting the Learners with this Section</p><p>Overview of the This Section introduces the Learner to the Short-term Insurance Act, 53 of main concepts of 1998 and the critical Sections pertaining to the credit environment within THE this Section BANK.</p><p>Short-term Insurance covers you against loss of your personal assets as well as insures you against potential liability. In other words, with Short- term Insurance you are Insured against natural disasters, for example fire, and storms, as well as against theft and your own negligence.</p><p>Summary of key Below is a summary of the key learning points of this Section. learning points  Short-term Insurance covers you against loss of your personal assets as well as insures you against potential liability. In other words, with Short-term Insurance you are Insured against natural disasters, for example fire, and storms, as well as against theft and your own negligence</p><p> The Short-term Insurance Acts attempts to protect the consumer against dishonest intermediaries</p><p> The purpose of the Act is to enable the consumer to make informed decisions regarding Short-term Insurance products</p><p> Section 1 of the Act deals with the appointment of a Registrar of Short-term Insurance</p><p> Part 2 deals with the registration of Short-term Insurers</p><p> Part 3-6 deals with the business and administration of Short-term Insurers</p><p> Part 7 deals with sound business practices, Policies and Policyholder Protection</p><p> Part 8 deals with all the provisions regarding Lloyd’s underwriters and claims against them, as well as all other provisions of the Act relating to Lloyd’s</p><p> Part 9 deals with the offences of Short-term Insurers and other persons and the subsequent penalties and fines that can be given to an Insurer</p><p> Part 10 deals with registration of Short-term Insurers before commencement of this act, the separation of the Short- and Long- term Insurance business and other general provisions</p><p> A minor, who is 18 years of age, may, without the consent of a Guardian, enter into a Short-term Insurance Policy</p><p>22 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>Summary, continued  Any Policy benefits must be paid to the minor. He/she may deal with the money as he/she sees fit, without the consent of a Guardian</p><p> Section 43 of the Act provides that the customer is free to choose whether to cede an existing Policy or take out a new Policy. The customer must be notified of his/her free choice in writing</p><p> Several Policyholder protection rules were instituted to ensure that Short-term business is conducted according to sound Insurance principles and practice and in the interest of the insuring public</p><p> All intermediaries must disclosure a summary of these rules to the consumer before any new or additional Contract is entered into</p><p> The Short-term Insurance Ombud investigates complaints from the public against Short-term Insurers that are members of the Ombud for Short-term Insurance Association</p><p> SASRIA (South African Special Risk Insurance Association) was established and registered during February 1979</p><p> SASRIA was established to insure incidents of political riot</p><p>23 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>Content covered in The following is covered in this Section of the Learner Guide. Included is a list the Learner Guide of topics as well as the page numbers relevant to the Learner Guide.</p><p>TABLE OF CONTENT</p><p>Content Page</p><p>Outline of the Learning Outcomes and Objectives 56 covered in this Section</p><p>Purpose and nature of the Act 57  Introduction 57  Purpose of the Act 57  Contents of the Act 58  Section1 – Definitions 60  Definition of a Short-term Policy 60  Part 1 Administration of the Act 63  Part 2 – Registration of Short-term Insurers 63  Part 3-6 – Business and administration of Short-term 63 Insurers  Part 7 – Business practice, Policies and Policyholder 63 Protection  Part 8 – Provisions relating to Lloyds 63  Part 9 – Offences and penalties 63  Part 10 – Transitional and general provisions 63</p><p>Capacity to conclude an Insurance Contract 64  Introduction 64  Minors 64</p><p>Sound business practices 66  Introduction 66  Free choice by customer 66-68  Business practices 69-70</p><p>Policyholder protection rules 71  Introduction 71  Purpose of the rules 71  Important features of the rules 71  Principles for disclosure 72</p><p>24 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>Content covered in the Learner Guide, TABLE OF CONTENT continued Content Page</p><p>Special Short-term risk Insurance 73  Introduction 73  History of SASRIA 73  What is covered by SASRIA 73  What is not covered by SASRIA 74</p><p>Summary 76</p><p>25 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>Activities covered in The following activities are covered in this Section of the Learner Guide. the Learner Guide</p><p>Page Activity</p><p>60- Activity: The Learner needs to find the definition of a Short-term Policy 62 and describe in his/her own words the meaning of each of the following Policies: Engineering Policy, Guarantee Policy, Liability Policy, Miscellaneous Policy, Motor Policy, Accident and Health Policy, Property Policy and Transportation Policy. Check the Learner’s understanding/ interpretation of each of these.</p><p>65 Activity: The Learner needs to investigate if the Bank can accept a Short-term Policy of a minor as security. </p><p>68 Activity: Self-explanatory. The Learner must explain the provisions of Section 43 on the Bank. Refer the Learner to the Security Manual for information.</p><p>70 Activity: The Learner needs to form a small study group with a fellow Learner/Learners and discuss the sound business practices between themselves. Assist the Learners with any uncertainties and/or concerns.</p><p>74 Activity: The Learner needs to discuss SASRIA Insurance with an Insurance Consultant and note his/her conclusions.</p><p>75 Activity: The Learner needs to complete the crossword. Across: 5. Policy benefits 6. Free choice 7. Riot 8. Eighteen 9. Government 10. Looting 11. Ombud</p><p>Down: 1. Disclosures 2. SASRIA 3. Receipt 4. Financial Services Board 5. Policyholder Protection Rules</p><p>77 Activity: Self-explanatory. The Learner needs to note additional learning points or draw a mind-map of the learning points in the space provided.</p><p>26 Version: 02/2004 IB CP 5 CG 3. Short-term Insurance Act, 53 of 1998</p><p>Activities covered in the Learner Guide, Page Activity continued</p><p>49 Activity: Self-explanatory. The Learner needs to note additional learning points or draw a mind-map of the learning points in the space provided.</p><p>27 Version: 02/2004 IB CP 5 CG</p>