Community scheme insurance has entered a new exciting era of change. Recently, the new community scheme legislation resulted in more emphasis on insurance at general meetings as well as much more focus on the previously ambiguous fidelity insurance rule.
Compulsory fidelity cover
Since October 2016, all community schemes are now required to purchase a minimum amount of fidelity cover. This compulsory requirement has shifted the previous lethargic approach to fidelity rules and has effectively reduced the overall cost of such insurance. Fidelity cover can be purchased for a fraction of its previous cost.
Managing agents are now also under pressure to revisit their own fidelity cover position as many underwriters will only provide cover against managing agent dishonesty where that managing agent has professional indemnity or fidelity cover.
The new legislation has resulted in an additional workload and as predicted, there are new demands for working smarter and more effectively. Software for managing community schemes is starting to become a new commodity with increased competition in this space.
Addsure and a few other insurers realised this a few years ago, and have since been preparing and developing systems to help deliver the fastest, most efficient and effective delivery of advice and claims service.
Addsure developed ATON – tailored software for insurance advice and claims in the sectional title environment. ATON software provides a professional platform to deliver comprehensive electronic advice in line with the FAIS Code of Conduct which also embraces the FSB’s (Financial Services Board) TCF (Treating Customers Fairly) guidelines.
Already, portfolio managers can have access to live, cloud-based claim information which means that portfolio managers can log in and keep track of claims as they are being processed.
Some direct insurers are starting to make their presence felt by offering software deals to managing agents and others offering inducements such as introductory cash incentives.
There are many constantly evolving and far better financial products available which should be carefully evaluated by trustees under the guidance of expert advice. Addsure has teamed up with insurers and software companies to ensure that independent insurance advisers and insurers are able to deliver the best technology available at the lowest possible cost.
Budgets will also be under increasing pressure as the prescriptive savings towards reserves and the new community schemes ombud services levy starts have to be allowed for. This is another reason why managing agents need well-designed systems to efficiently manage their schemes in a cost-effective manner.
We are optimistic about the new challenges as it is bringing with it service improvement and efficiency.
We wish all our clients and friends a prosperous 2017!
Author: Mike Addison, Addsure
Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069