HOW THE DEBELLA SYSTEM WORKS . . .
The Financial Sector Conduct Authority (the FSCA) (formerly the Financial Services Board) has a campaign to ensure that anyone who collects premiums on Short Term Insurance Products has been properly authorised to do so, in writing, by the insurer concerned, as required in terms of S45 of the Short-Term Insurance Act, 1998 and Regulation 4.
In terms of the amended Regulation 4.2, (2) that became effective on 28 September 2018, a motor dealer who receives premiums must account for such premiums properly and promptly and open and maintain one or more separate bank account into which premiums are to be received.
The separate bank account may only contain monies collected from policyholders and may not contain any monies or funds of the motor dealer.
This means that motor dealers who continue to collect premiums will not be able to include the premium for any extended motor warranty they may sell on the main dealer invoice. Instead, they will have to issue a second invoice with instructions to the credit provider (bank) to pay the premium into a separate bank account.
The written authorisation by the insurer that allows the motor dealer to collect and account for premiums must, amongst other things, specify the purposes for which premiums of the insurer received or held by the motor dealer may and may not be utilised for by the motor dealer. Particularly, these premiums may not be used by the motor dealer for its own purposes.
In addition, an insurer must, on an ongoing basis, take reasonable steps to monitor any motor dealer that has been properly authorised to collect premiums on its behalf, actually deals with premiums in accordance with the authorisation and in accordance with Regulation 4. This probably means periodic audit visits from the insurers concerned.
Knowing and appreciating the practical difficulties motor dealers are now faced with the and the problems of managing the processes that must be in place if premiums are collected, Debella have developed a solution specifically for the benefit of motor dealers who sell Short Term Insurance Products.
Debella will collect the premiums for you.
Any motor dealer may apply to join Debella as a member. Once membership has been confirmed, all the facilities immediately become available to the dealership.
HOW THE PREMIUMS ARE COLLECTED
Debella has teamed up with Insure Group Holdings Ltd
- Insure Group Managers Ltd (IGM) is a registered collection agency and its main business is the collection of premiums on short term insurance products. It's what IGM does and has been doing since 1998.
- IGM is an authorised financial services provider (FSP 45351) and has the written authorisation from all short-term insurers that underwrite extended motor warranties and is able to collect and account for premiums payable to these insurers as is required by S 45 of the Short-Term Insurance Act, 1998.
- Debella has the systems to handle any number of payments from all banks, reconcile these receipts and pay the motor dealer, the insurer and the warranty administrator the amounts due to each within one week of receipt from the bank. Motor dealers will receive commission payments regularly and without fail.
- Debella is an authorised financial services provider (FSP 34111) and has been granted the right to use the patented Premium Collection Facilitation System. This is an IT system that has been designed specifically to manage the collection and payment of premiums on extended motor warranties sold by motor dealers. The system has been deployed by IGH.
- The Debella-IGM invoicing procedure has been specially designed with motor dealers in mind and is simplicity itself. Training will take five minutes. The motor dealer will have to make the least amount of change.
WHAT YOU NEED TO DO
Each time you sell any form of insurance product you must issue a separate Debella Invoice for that product or for those products. This is done each time by logging on to the Debella website and providing the system with the details of the transaction. An invoice is generated immediately and can be downloaded in PDF format.
The Dealership’s own invoice must include everything except the warranty products.
The bank must receive two invoices
- The Dealership invoice for the vehicle including any non-insurance VAPs and
- The Debella invoice for any insurance product such as an extended warranty or paint and scratch indemnity or small area repair warranty.
The bank will pay you for the vehicle and any VAPs other than an insurance product.
The bank will pay the full amount of the premium on the product sold to Debella.
Debella will pay you all commissions and inspection fees (if any) at the end of each week
Debella has been integrated into the Seriti and Signio dealer platforms. We will show you how to get the best from both these applications.
WHAT DEBELLA DOES
- We reconcile all payments each week and pay you, the motor dealer, all commissions, inspection fees and any other amount the administrator has agreed to pay you.
- Each weekly payment comes with a fully reconciled VAT compliant bordereaux and the amount due is paid by way of Electronic Funds Transfer.
- The net premium is then paid to the insurer with a full reconciliation and a VAT compliant bordereaux.
As a member you are able to log on to the System and call up details of all or any transaction.
The System maintains permanent records of all transactions, including any cancelled transactions.
Credits notes can also be requested for any deals that have been cancelled.
|ABSA||Per product on the invoice||R30.00|
|Toyota Finance||Per Invoice||R45.60|
|Volkswagen Finance||Per Invoice||R45.60|
|MFC||Per product on the invoice||R36.00|
|Standard Bank / Stannic||R0.00|
|All other banks / Cash Deals||R0.00|
- Debella charge R115 plus VAT (R132.25) per transaction irrespective of the number of premiums collected in any one payment. (e.g. a an extended motor warranty product and a Paint Tech product sold to the same client)
- The fee of R115 plus VAT (R132.25) per transaction may legitimately be passed on to the consumer should the motor dealer so choose.
- The difference in fees should not be a concern at all – the hassle factor of generating and managing multiple invoices, additional payment reconciliations and VAT compliance certainly is.
- Simple and easy to use
- All the major banks are able to manage split payment instructions
- All the major warranty administrators have agreed to use the System
- Reduced administration
- VAT compliant documentation and reconciliations
- Instant records of all transactions and transaction history available to all members
- Once an invoice has been generated by the Debella system and submitted to the Bank it automatically triggers a ‘tracking mechanism’. This means that the Debella system will, on a daily basis, produce error reports if any premium is not received or if an incorrect premium is received. Debella support staff monitors the error reports on a daily basis and conduct regular follow up calls.
- Any participating party can ask for a detailed bordereaux on products sold and premiums collected for any previous period or periods.
- No more waiting for a reconciled statement requesting commission, as it is paid on a weekly basis and is accompanied with a full report with details of the client, product, premium and commission paid. (This one designed for the Admin department)