The Long-term Insurance Act for brokers: the sections that still apply, and how they show up on WhatsApp

Contents

1. What the Act still covers after the Insurance Act
2. The sections a brokerage meets every week
3. Section 45: the campaign message that becomes an inducement
4. Sections 47 and 47A: money, receipts and the brokerage account
5. Sections 48, 52 and 59: the three conversations that end up in a complaint
6. Messages that keep the thread on the right side of the Act
7. A five-step compliance check for long-term business on WhatsApp
8. Frequently asked questions

The Long-term Insurance Act 52 of 1998 is the South African statute that governs life, funeral, credit life, disability and other long-term policies. For a brokerage it is no longer the licensing law — that moved to the Insurance Act 18 of 2017 — but its conduct provisions are very much alive. Part VII of the Act still decides what you may offer a client to sign, what receipt you owe for cash, who may touch premiums, what you may be paid, what happens when a premium is missed and when a wrong answer on a proposal lets an insurer walk away from a claim.

Most of those moments now happen in a chat thread. This guide maps the sections that still bite to the messages your advisers actually send, so a compliance officer can check the one against the other.

What the Act still covers after the Insurance Act

When the Insurance Act 18 of 2017 came in, it took over the prudential side — registration, governance and financial soundness of insurers — and amended the Long-term Insurance Act rather than repealing it. The consolidated text on Acts Online shows the pattern clearly: section after section in Part VII carries the note “substituted by … Act No. 18 of 2017”, and references to the Registrar now read as references to the Authority, the Financial Sector Conduct Authority. Section 1A ties the Act to the Financial Sector Regulation Act, so FSCA conduct standards and its supervisory powers sit on top of it.

Two points follow for a brokerage principal. First, the Act is not legacy: if a clause is not marked repealed, it applies. Second, it does not replace FAIS. The Act regulates the policy and the money around it; the FAIS General Code governs your advice and your records. A single WhatsApp conversation can engage both — which is why the record-keeping side is covered separately in our guide to FAIS record-keeping for WhatsApp.

The sections a brokerage meets every week

Section	What it says, in short	Where it appears in a chat
45 — inducements	No one may offer valuable consideration to get a person to enter into, continue, vary or cancel a long-term policy, unless done in accordance with the rules made under section 62.	Campaign messages that promise a gift, voucher or “something extra” for signing or for not cancelling.
47 — cash premiums	Cash paid in notes or coins requires a written receipt naming the recipient, their address and phone number, the policy number and the insurer. Payment to a person on the insurer’s behalf is deemed payment to the insurer.	“I gave the money to your consultant” — and no receipt in the thread.
47A — premium collection	An independent intermediary may not receive, hold or deal with long-term premiums unless authorised by the insurer as prescribed by regulation, and only in line with the regulations.	Clients sending proof of payment to the brokerage’s account, or advisers sharing banking details.
48 — policy summary	The insurer must give the policyholder a summary of material representations, premiums, benefits and exclusions, not later than 60 days after the policy is entered into or varied. The policyholder may ask for a copy of the policy.	“Can you send me my policy?” — the request that often reveals the summary never reached the client.
49 and 49A — remuneration and binders	No consideration for intermediary services other than commission or remuneration contemplated in the regulations; binder activities only under a written agreement with the insurer.	Side arrangements discussed informally, or an adviser “confirming cover” the firm has no binder to give.
52 — missed premiums	The insurer must notify the policyholder of non-payment; a monthly policy stays in force for 15 days after the due date, a policy paid at longer intervals for one month.	The client who says “I think my policy lapsed”.
59 — misrepresentation and non-disclosure	An untrue statement or a failure to disclose only lets the insurer avoid or limit the policy if it was material — judged by what a reasonable, prudent person would consider should have been disclosed.	Health or lifestyle questions answered by the client in the chat rather than on the proposal.
62 — Policyholder Protection Rules	The Authority may make rules on disclosure, cancellation rights, policy wording, advertising and more.	Almost everything above: the rules fill in the detail the Act leaves open.

The section numbers are worth keeping in front of advisers because insurer correspondence and Ombud determinations cite them. The full text of each section is on the government’s Long-term Insurance Act page in its original form, and on Acts Online as amended.

Section 45: the campaign message that becomes an inducement

Retention campaigns are where well-meaning firms trip over section 45. The prohibition is wide: it covers offering, not only giving, it covers indirect consideration, and it covers persuading someone to continue or cancel a policy, not just to buy one. A “stay with us and we will send you a voucher” message to a client who asked about cancelling is exactly the scenario the section targets, unless the Policyholder Protection Rules permit it.

The practical control is a review step before any outbound campaign that mentions a benefit not written into the policy itself. Keep the approved wording, the date it was approved and who approved it, so the firm can show what was offered to whom. Service messages — a premium notice, a document request, a claims update — rarely raise the issue; marketing messages built around an incentive almost always should.

Sections 47 and 47A: money, receipts and the brokerage account

Deemed payment cuts both ways. A client who paid cash to someone acting for the insurer is treated as having paid the insurer — which is good news for the client and a liability for whoever took the money without a proper receipt. Section 47 sets out what that receipt must show, and a thumbs-up emoji in a chat does not meet it.

Section 47A is the long-term equivalent of the better-known short-term rule: no insurer authority under the regulations, no handling of premiums. Most brokerages selling long-term risk products never collect at all — the insurer collects by debit order — and that is the cleaner position. If yours does collect, the authority, the separate account and the monthly reconciliation are set out in our guide to premium collection and the brokerage account. Either way, the firm’s position should be written down once and repeated identically in every payment conversation.

Sections 48, 52 and 59: the three conversations that end up in a complaint

The policy summary nobody received

Section 48 puts the duty on the insurer, not on you: the summary must reach the client within 60 days of the policy being entered into or varied, and the client may ask for a copy of the policy itself. Your job is to notice when it has not arrived. A client asking for “my policy” months after inception is a signal worth checking against the insurer’s records, because the summary is prima facie proof of the agreement and, unless shown otherwise, of what was material to the risk.

The missed premium

Section 52 requires the insurer to notify the policyholder of non-payment and keeps a monthly policy in force for 15 days after the due date. That is a floor, not a promise of cover in every situation; the detail, the Policyholder Protection Rules on grace periods and the court case that limits them are in our article on lapsed policies, grace and reinstatement.

The disclosure answered in the chat

Clients answer underwriting questions wherever it is convenient, and a voice note saying “no, nothing serious, just some blood pressure tablets” is information. Under section 59 the test for whether a non-disclosure matters is objective — what a reasonable, prudent person would consider should have been disclosed — so the chat may later be the best evidence of what the client actually told the brokerage. The rule for advisers is simple: anything material said in the thread goes onto the proposal, and the client confirms the proposal as submitted.

Messages that keep the thread on the right side of the Act

Three examples for the conversations above, written for a brokerage that does not collect premiums itself. Adapt the wording to your own insurer arrangements and keep the placeholders in square brackets.

Policy copy request:
“Hi [first name], thanks for asking. Your [insurer] policy [policy number] should have come with a summary of your cover from the insurer. I have asked them to send you the full policy document as well and will confirm here once it is on its way. If anything in the summary does not match what we discussed, tell me and I will take it up with them.”

Missed premium:
“Hi [first name], [insurer] has let us know the premium on policy [policy number] was not collected on [date]. Your policy has a grace period under its wording — I am checking the exact date with them now. Please don’t stop the debit order or pay anyone directly; reply here and we will agree the next step together.”

Disclosure in the chat:
“Thanks [first name], that is important for your application. I have added the medication you mentioned to the health section of the proposal. Before it goes to [insurer], please read the attached proposal and reply ‘confirmed’ if every answer is correct and complete.”

A five-step compliance check for long-term business on WhatsApp

1. Map your arrangements. For each long-term insurer: do you hold a section 47A collection authority, a section 49A binder, or neither? Write it in one place advisers can see.
2. Screen campaign wording for section 45. Any message offering something of value in connection with taking up, keeping, changing or cancelling a policy needs a compliance sign-off.
3. Standardise the money message. One approved wording about how premiums are paid, never improvised by an individual adviser.
4. Treat policy and lapse requests as work items. A “send me my policy” or “my policy lapsed” message should have an owner and a follow-up, not sit in one person’s phone.
5. Move disclosure out of the chat and into the proposal. Then keep the thread, because it shows what the client said and when.

The market context for South African long-term business — regulators, collection methods, product mix — is in our South Africa country guide.

This is the part a shared WhatsApp tool can support without making legal decisions for you. In ORIS every conversation sits on the customer record in a shared inbox rather than on an adviser’s handset; campaigns go out only from Meta-approved templates tagged as service or marketing, to clients who have opted in; AI drafts and rule-based auto-replies are instructed never to promise cover or price and never to give advice, and negative or sensitive replies are escalated to a person. ORIS has no payment function, so it never touches a premium. Audit logs and CSV export give compliance the trail behind each conversation. To see how a lapse or disclosure thread looks in practice, book a demo.

Frequently asked questions

Is the Long-term Insurance Act still in force?

Yes, in amended form. The Insurance Act 18 of 2017 took over the prudential regulation of insurers and amended the Long-term Insurance Act, but the conduct provisions in Part VII — inducements, premium handling, remuneration, missed premiums, misrepresentation and the Policyholder Protection Rules — continue to apply, with the FSCA as the Authority.

Does the Act apply to brokers or only to insurers?

Both. Several sections bind “any person” or independent intermediaries directly: section 45 on inducements, section 47A on handling premiums and section 49 on remuneration. Others, like section 48 on the policy summary, place the duty on the insurer, but the broker is usually the first to see when it has not been met.

Can a WhatsApp message replace the policy summary?

Not on your own initiative. Section 48 requires the insurer to provide the summary in writing or in another form prescribed by the Authority. A broker can forward or explain the insurer’s document in the chat, but should not present a self-written recap as the summary the Act requires.

Is a small gift to a client who renews an inducement?

It can be. Section 45 prohibits offering or providing valuable consideration to induce a person to enter into, continue, vary or cancel a long-term policy, unless done in accordance with the Policyholder Protection Rules. Check any incentive against those rules with your compliance officer before it appears in a message.

How does the Act relate to FAIS?

They work side by side. The Long-term Insurance Act governs the policy, the premium and the money around it; FAIS governs the advice, the disclosures you make as a provider and the records you keep of them. A compliant WhatsApp process has to satisfy both.