NEWS ANALYSIS: How did auditors miss IGM scandal?
While insurers and the regulators wonder who dropped the ball, another culprit needs questioning
The latest corporate scandal to rock SA, which involves an almost R1bn combined loss suffered by insurance heavyweights Santam, Old Mutual, Guardrisk and Hollard, appears to have been an accident waiting to happen.
If you missed the story, first reported by Daily Maverick, the loss stems from the collapse of Insure Group Managers (IGM), an independent intermediary that collected premiums from customers on behalf of the aforementioned companies and at least 45 other insurers. The practice stems from a quirk of the SA insurance industry, which is traditionally very reliant on brokers to sell policies. Independent intermediaries such as IGM are allowed to collect short-term insurance premiums from policyholders and hold them for up to 45 days in liquid investments...