Insurance Distribution Agreement Template for South Africa

The Insurance Distribution Agreement is essential for establishing formal distribution partnerships in the South African insurance market. It is primarily used when an insurer wishes to appoint intermediaries, brokers, or other distribution partners to sell and market their insurance products. The agreement must comply with strict regulatory requirements, particularly the FAIS Act and Insurance Act, while addressing crucial commercial aspects such as commission structures, service levels, and operational procedures. This document is vital for ensuring clear accountability, regulatory compliance, and effective risk management in insurance distribution relationships. It includes specific provisions for South African regulatory requirements, including fit and proper requirements for representatives, commission caps, and mandatory disclosures to customers.

1. Parties: Identification of the insurer and distributor, including registration numbers and FAIS license details

2. Background: Context of the agreement and relationship between parties

3. Definitions: Defined terms including regulatory-specific terminology

4. Appointment and Scope: Terms of appointment, territory, and products covered

5. Regulatory Compliance: FAIS Act compliance requirements and other regulatory obligations

6. Distributor Obligations: Core responsibilities including sales, marketing, and customer service

7. Insurer Obligations: Support, training, and materials to be provided

8. Commission Structure: Remuneration terms complying with regulatory limits

9. Training and Competency: Required qualifications and ongoing training requirements

10. Reporting and Records: Required reports, documentation, and record-keeping obligations

11. Data Protection: POPIA compliance and data handling requirements

12. Intellectual Property: Usage rights for trademarks, marketing materials

13. Term and Termination: Duration, renewal, and termination provisions

14. Post-Termination: Obligations and procedures following termination

15. General Provisions: Standard boilerplate clauses under South African law