INTRODUCTION

Section 3A(2)(a) of the FAIS General Code of Conduct stipulates that every provider, other than a representative, must adopt, maintain and implement a Conflict-of-Interest Management Policy that complies with the provisions of the Act. Credit Guarantee and its representatives (including staff and associates) must avoid and where that is not possible mitigate any Conflict of Interest between us and clients.

WHAT IS A CONFLICT OF INTEREST?

A Conflict of Interest is an interest that may influence the objective performance of our obligations or prevent us from rendering unbiased and fair financial services to our clients.

By us/we/ourselves we mean Credit Guarantee Insurance Corporation of Africa Limited (CGIC or Credit Guarantee), our representatives and our Associates.

WHAT FINANCIAL INTEREST WE MAY NOT GIVE?

We may not offer any financial interest to representatives for:

• favoring quantity of business over the quality of service; or
• giving preference to a specific product supplier where more than one supplier can be recommended to a client; or
• giving preference to a specific product of a supplier where more than one product of that supplier can be recommended.

WHAT FINANCIAL INTEREST WE MAY GIVE?

We may only offer a representative, a Broker that performs functions for CGIC’s Policyholder or any other authorised Financial Services Provider:

• Commission regulated under the Short-Term Insurance Act;
• Fees authorised under the Short-Term Insurance Act;
• Fees for the rendering of a financial service (subject to client consent and discretion);
• Fees or remuneration for the rendering of services to a third party, reasonably proportionate (commensurate) to the service being rendered;
• Immaterial financial interest to the maximum of R1000 (one thousand Rand) per representative or Financial Services Provider in one calendar year.

WHAT MAY WE RECEIVE?

Credit Guarantee employees may only receive what we are allowed to give (except for Commission). Please see the five bullet points above.

HOW WE IDENTIFY IF CONFLICT OF INTEREST EXISTS?

We identify this by analysing:

• the ownership interests of our Third-Party relationships;
• the payments received and/or offered between Third Party relationships;
• the remuneration models of Credit Guarantee representatives and Third Parties;
• relevant management information;
• complaints received.

HOW WE MANAGE CONFLICT OF INTEREST?

Where reasonably possible we will avoid Conflicts of Interest. If this is not possible, we will manage the risk of Conflicts of Interest by:

• Reviewing conflict of interest risk trends in the Conflicts of Interest & Gifts Register;
• Creating awareness with our employees on the reporting of Conflicts of Interest and Gifts Declaration.
• Disclosing potential conflicts identified in our Disclosure Notice and policy schedules and wording. Clients are encouraged to read these documents;
• Ensuring understanding and adoption of the conflict of interest & Gifts policy and management measures by all employees, representatives and Associates (see Annexure A);
• Ensuring appropriate rules are put in place around the receipt of gifts, incentive and remuneration schemes to ensure that these do not impair fair customer outcomes;
• Credit Guarantee may not cancel your insurance merely by informing your broker. There is an obligation to make sure the notice has been sent to you;
• Credit Guarantee, not the broker, must give reasons for repudiation of any claim.

HOW WE MITIGATE CONFLICT THAT CANNOT BE AVOIDED?

Where there is no other way of managing a conflict, or where the measures in place do not sufficiently protect the client’s interests, the conflict will be disclosed to allow the client to make an informed decision about whether or not to accept the Conflict of Interest.

Example of conflict of interests that exist in Credit Guarantee include:

• Broker fees arrangements;
• Lead fee arrangements;
• Old Mutual ownership structures;
• Group initiatives (Credit Guarantee is part of the Old Mutual Group);
• Performance-based remuneration;
• Incentives;
• Ad-hoc competitions.

CONSEQUENCES OF NON-COMPLIANCE

Non-compliance with this policy is viewed in a serious light and employees may be subject to disciplinary action where appropriate.

THIRD PARTIES THAT CREDIT GUARANTEE HAS AN OWNERSHIP INTEREST IN

As required by section 3A(2)(b)(iii) of the General Code of Conduct, a list of Associates that Credit Guarantee has an interest in is listed in Annexure A.

THIRD PARTIES THAT HAVE AN OWNERSHIP INTEREST IN CREDIT GUARANTEE

As required by section 3A(2)(b)(vi) and (vii) of the General Code of Conduct, a list of Associated entities that have an ownership interest in Credit Guarantee are listed in Annexure A.

REPORTING OF CONFLICTS OF INTEREST

Any person that would like to raise any potential Conflicts of Interest is encouraged to report it. Should you wish to remain anonymous, please use oldmutual@tip-offs.com or call 0800 222 117 (free from a cellphone and landline, available 24 hours a day and in multiple languages). The Anonymous Reports website is managed and controlled by Deloitte Tip-offs Anonymous, an organisation that is independent of the Old Mutual Group. Otherwise, feel free to use: compliance@cgic.co.za

For queries or questions, please contact:

Steve Smith: Chief Risk and Compliance Officer
Email: steves@cgic.co.za
Tel: 011 889 7033

Francis Gumede: Regulatory Risk & Compliance Manager
Email: francisg@cgic.co.za
Tel: 011 889 7532

ANNEXURE A

List of Associates

In terms of Section 3A(2)(b)(iii) of the General Code of Conduct, the list of the Company’s “Associates” is as follows:

Associate Name	Relationship
Galilean Properties (Pty) Limited	A wholly owned subsidiary of Credit Guarantee (under voluntary liquidation).
Old Mutual Insure	Credit Guarantee’s Holding Company
Merx Underwriting Managers (Pty) Ltd	A subsidiary of the Holding Company
Old Mutual Alternative Risk Transfer Insure Limited (Mutual & Federal Company Risk Transfer Limited)	A subsidiary of the Holding Company
Sintelum (Pty) Ltd	A subsidiary of the Holding Company
Mutual and Federal Company of Zimbabwe (Pvt) Ltd	A subsidiary of the Holding Company
Old Mutual Holdings (Mauritius) Limited	A subsidiary of the Holding Company
ONE Financial Services Holdings (Pty) Ltd	A subsidiary of the Holding Company
Elite Risk Acceptances (Pty) Ltd	A subsidiary of the Holding Company
Versma Bestuurdienste (Pty) Ltd	A subsidiary of the Holding Company
Primak Insurance Brokers (Pty) Ltd	A subsidiary of the Holding Company
Genric Insurance Company Limited	A subsidiary of the Holding Company

None of the Associates listed are involved in the administration, distribution, marketing or selling of the Company’s products.

Third Parties in which Credit Guarantee holds an ownership interest.

In terms of Section 3A(2)(b)(v) and (vii) of the General Code of Conduct, the list of “third parties” in which the Company holds an Ownership Interest is as follows:

Third Party Name	Relationship
Galilean Properties (Pty) Limited	A wholly owned subsidiary of Credit Guarantee (under voluntary liquidation)

Third Parties which hold an Ownership Interest in the Company

In terms of Section 3A(2)(b)(vi) and (vii) of the General Code of Conduct, the list of “third parties” that hold an Ownership Interest in the Company is as follows:

Third Party Name	Relationship
Old Mutual Insure Limited	Shareholder and Holding Company (75%)
Atradius Participations Holding S.L. (Spain)	Shareholder (25%)