An intermediary in car insurance will be an agent or broker acting on behalf of an insurance company; it is a person who arranges insurance with the approval of the company. Agents and brokers play a huge role in short term insurance; nowadays if one needs car insurance you look on the internet or you deal with an agent or broker you know. It is extremely rare that someone will walk into an office of an insurance company and ask to take out car insurance.

The Financial Advisory and Intermediary Services Act (FAIS) not only regulated the way banks and insurance companies deal with their clients; it specifically also refers to intermediaries, realizing that they are major role players in the industry. The aim of FAIS was to regulate the insurance profession and ensure that intermediaries are professional and responsible in their dealings with the public.

Since the implementation of the FAIS act all intermediaries had to be licensed and are subject to meeting “Fit and Proper” requirements before they are allowed to operate. These requirements refer to minimum qualifications, competency, experience, operational ability and financial soundness. Intermediaries have to abide by a Code of Conduct that detail requirements such as providing accurate advice, keeping records and full disclosure of products and cost, including their commission earned.