A recent High Court judgment highlights the critical importance
of strict compliance with binder agreements and licensing
conditions in the insurance sector. The court confirmed that where
an underwriting manager exceeds its mandate or disregards
regulatory limits, an insurer is entitled to enforce its
contractual rights — including urgent access to underwriting
data.
Background
Underwriting managers act under binder agreements which define
the scope of their authority. These agreements typically restrict
them to the insurer's licence conditions, impose record-keeping
obligations, and grant the insurer wide rights of oversight. Where
an underwriting manager operates outside these boundaries —
for instance, by writing business outside South Africa when only
licensed to do so locally — both insurer and manager are
exposed to regulatory sanction, reputational damage, and potential
serious financial losses.
