REFUNDS, RENEWALS & CANCELLATIONS
What is Investment Fraud Insurance?
Investment fraud insurance offers protection to you in the case that there is news relating to management committing fraud, deceiving or otherwise misleading shareholders, which results in the share price dropping significantly. The objective is to protect innocent shareholders against realized losses in share prices which arise from such news. The product was developed in response to ever increasing discovery of management fraud, where shareholders are ultimately the ones who lose.
Is this a complicated product?
No, this is a simple insurance product.
How is InvestSure different from normal insurance?
How much does it cost?
The product costs 0.56% of the value of your purchase. This translates to a cost of 56 cents for every 100 rand you invest. This covers you for 12 months, even if the share price increases! Therefore if at the end of year 1 the share price is R150, you be covered for the full R150, despite paying 0.56% of R100. For example: You buy R2,000 worth of shares, we charge you R11.00 to insure these for a year. Only R11 for an entire year of cover!
What if the value of my shares increases?
We hope the share price on all shares increase; if it does you will receive the same protection without needing to pay additional premiums.
How long am I insured for?
You are insured for 12 months.
Where can I buy this protection?
Easy Equities are currently the only trading platform with the product, meaning you can’t get this protection anywhere else!
Does the share price need to go below what the shares cost me?
No, your claim is calculated on the share price the day before the news event. Your original purchase price has no impact on the calculation of the claim.
How does this impact my returns?
The product is priced as cheaply as possible in order not to influence your returns severely if no event occurs. The fee, together with Easy Equities brokerage, is still cheaper than most traditional management fees, but provides a tangible benefit.
Is there reinsurance in place?
Yes, the product is reinsured by one of the largest reinsurers in the world.
Is there paper work I have to fill out?
What is covered?
The product is designed specifically to protect investors from the negative effects of information around management fraud and dishonesty coming to light in companies in which they made investments in good faith. Management wrongdoing includes things like
What is not covered?
The product does not cover losses due to, macro or micro economic factors, political risks or any general business risk such as failure to execute a business plan, meet estimates/projection or market expectations. Directors and their immediate family who hold shares in the company in which they are directors do not qualify for the cover.
What is the News Board?
How do I know when the News Board has a new event published?
All events that fall within the scope of the cover will be published on the News Board. If you believe that a major event was not published feel free to e-mail email@example.com. Please include a reference to the event such as a link to a news website so we can investigate the event.
What if I have heard of an event which is not on the News Board?
We will publish all events which fall within the scope of the Investment Fraud Insurance policy. If you believe that we have missed a major event feel free to send an email to firstname.lastname@example.org or info@InvestSuretech.co.za and we will get back to you, as well as add the items to the News Board if the news does fall within the scope of the policy.
InvestSure is paid a fixed percentage of all premiums by the insurer Compass Insure; and in no way benefits if fewer claims are paid. So when we consider claim events to list on the Newsboard, InvestSure is not thinking about profits but rather the honest and fair treatment of our clients in accordance to the promise made in our policy wording.
What is the News Date?
Any date on which allegations or information within the scope of the product comes into the public domain through multiple sources.
What are the share price triggers and why do they exist?
What happens when the share price triggers are met?
What happens if I sell shares I already bought this annual insurance for?
If you sell all your shares then a refund will be calculated and paid into your trading account at the end of the day. See Refunds, Renewals and Cancellations for more.
Who does not need to buy this product?
Literally any person with an extremely diverse portfolio. This is a personal decision and we can’t make it for you.
Why is there a limit to how much I can insure in total?
Why am I not able to insure all shares which appear on the platform?
What happens if I own 1000 shares in a single company, but I have only insured some of those shares, and then I sell some of them?
If you sell some of the shares out side of a claim period, we assume that the first shares sold are uninsured so your cover is maintained as far as possible. If you sell shares because of a claim then those sold shares will be classified as insured ensuring you will receive maximum payout.
Can I insure my other investments?
Not yet, we are looking into other assets, such as listed bonds and select US stocks as well as moving towards adding more and more JSE listed shares, but for now we can only cover your Top 100 JSE listed shares.
How can I contact you?
When can I claim and how will I know that I can claim?
We will send you an e-mail if you have insured shares in a company that is affected which will allow you to recover some of the losses experiences by the share price. This is an insurance first! Claiming is as easy as selling your shares! If you sell the shares that are insured during the claims period of 30 days we will automatically review and calculate the claim amount payable to you. You do not have to do anything else, just sell the shares that are insured and qualify for that claim.
How do I claim?
The claims process is automated. This is another world first. Simply sell your shares once the triggers have been met (within the time frame stipulated – 30 days) and the claim will be paid directly into your trading account by the end of the day.
How long do I have to sell my shares if I want to claim?
You can sell your shares within 30 days from the News Date.
Do I need to submit any documents to claim?
No, you do not have to submit any documents or complete any forms. The claim will be handled automatically after you initiate the claim on the trading platform.
How is the claim calculated?
• Opening Price is the closing share price on the day before the news was published.
• Trigger Price is the Opening price less 10% (Opening Price * 90%).
• Realised Price is the share price when you sold your shares.
• The client keeps the amount they sold their shares for.
Determination of claim amount per share:
Trigger Price less the higher of the Realised Price or 30% of the Opening Share Price (Limit of Cover).
What is the Limit of Cover?
When calculating claims the Realised Price (please see How is the claim calculated?) will be capped at a minimum of 30% of the Opening Share Price.
Claim example with sell below the Limit of Cover:
How fast will my claim be paid?
Claims are automatically settled and you do not have to submit any documentation. As a result of our world class technology we can pay claims faster than any other insurer!
How do I get paid for a claim?
Will a claim ever be rejected?
Who pays these claims?
Compass Insurance Company Limited is the insurer. They also have reinsurance from through one of the worlds’ largest reinsurers.
Refunds, renewals and cancellations
If I sold all my shares, do I get a refund for the annual premium I paid?
How does a refund get calculated?
Refunds are calculated on a pro rata basis when you sell your shares and paid into the clients trading account. Therefore if you bought and insured 100 shares in company ABC at R100 per share on 1 January and sold all those shares at the same price on 30 June; you would be entitled to a refund of 50% of the premium paid, as long as the sale did not result in your receiving a claim.
How do I renew my insurance?
What if I want to cancel my policy?
You can cancel your policy at any time by selecting “cancel policy” on the shares that are insured. You will receive a refund on premiums that have been paid and the refund will be automatically paid into your Easy Equities trading account.
What happens after 1 year from inception date?
A message will be sent to you asking to renew your policy. You have the option to renew all your covered shares at that date.
Tax treatment differs on an individual basis depending on whether you are a:
For advice please contact a tax practitioner.