Hi,

I took out Life Insurance through a Broker in 2016, during that year my wife lost her job and I had to cut down on my family financila commitments, and one of those was the cancellation of my Life Policy with Sanlam which i deemed expensive. I had signed a Loss of Income document with the broker anticipating that i would be able to continue paying for the Life Policy. As part of the Cancellation, I informed the Broker that I could no longer afford the Policy and that I cant afford to pay him his commission.  

Now he has handed my to the Attorneys, claiming that i owe him lost commission from my policy. Although I understand his side of the sorry, i firmly believe that it is unfair to expect me to pay him the money I dont have. I am currently unemployed and working to build my IT company from scratch and there is no way i have the requisite R19k that him through his attornerys are claiming from me, further there is no way i can amake an arrangement as i have no definitive Source of Income to make a deal. Then again i belive that it is unfair for me to be obligated to pay a service i cant afford and no longer need due to my financial situation.

What can i do or how do i respond to these attorneys? 

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

What makes you think that you are liable to the broker for his commission? No, the commission is normally paid to the broker by the insurance company, such as Liberty. It is NOT normal for you (as the client) to pay the broker commission. Why would one ever agree to that?! No, never. 

I think that you need to ask the broker questions, and ask to see the policy document, and the section therein which says that you are liable for the commission. If it doesn't exist, tell the broker to get lost!

As far as I am aware, it is industry normal for the broker to have an agreement with the insurance company in terms whereof he is paid a commission for signing up clients. If the client cancels the policy after only a few months, the insurance company asks the broker to pay back some of the commission. At no point in time are you brought into the equation. 

That's how you need to respond to the attorneys. Deny liability for the commission, and ask them to provide you with the relevant documentation which proves that you are liable. You can say that if they can prove your liability, you will then consider making a without prejudice settlement proposal... but until then, you are not liable!

Basically what I'm saying, is WHERE is the agreement which says that you are liable for the commission? I don't believe that one exists. 

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.