The insurance industry like others is not immune to bad operators. This article highlights some of the steps taken by insurance regulators to protect South African consumers seeking Funeral Policies. These checks and balances will help you determine whether you are dealing with a legitimate provider or not.
The Zimele Initiative launched by the Life Offices Association (LOA) ensures that low-income earners are given access to appropriate, affordable financial services products.
Zimele branded products are an embodiment of ethical, well-suited products that meet the needs of many lower income South Africans. They are known as CAT minimum standard products which stand for:
Many companies have already adopted these Zimele standards that essentially guarantee fair charges, easy access to products via certain ATM's or retailers such as Shoprite, and acceptable terms to all South Africans.
One of the key provisions of the CAT standards, is the adherence to premiums being less than or equal to the maximum rates determined by the Life Offices Association and National Treasury.
So it clear, consumers should know that funeral plan providers bearing the Zimele stamp of approval, are providing products that are there to serve, not exploit.
Another provision is that a summary of policy terms must be provided to customers in writing, on their request, in any of the 11 official languages.
Further to the above, no HIV / AIDS exclusions may be applied at claims stage for lives accepted onto the policy.
There are other provisions in addition to the ones mentioned above, which makes this initiative very special to protecting the rights and dignity of all South Africans rich and poor.
Funeral plans can be sold through different stakeholders such as banks, retailers, funeral parlours etc.
You must check that the seller you are dealing with is registered on the Life Offices Association (LOA) Intermediary Register as a representative.
Read the sellers brochures for details about:
The seller must show you documentation to prove this.
The good news is that the Financial Advisory and Intermediary Services (FAIS) Act has put the Financial Services Board (FSB) in a much better position by helping it address many problems in the insurance industry − however be wary about who you deal with.
The most important feature of any funeral assistance policy / master policy is that the policy should be underwritten by a registered long-term insurance company.
Here is a list of registered long-term insurers opens in new window.
This is to ensure that the member is guaranteed a legitimate claim in the case of the insured event of death, because only an insurer has the resources to accept large scale risks amongst a wide customer base, and honour payment of claims as these arise.
In the membership certificate that must be provided to the policyholder, the certificate must clearly outline the:
The certificate must also outline other necessary information for the Policyholder to know such as, when the cover starts, what is covered, the exclusions, waiting periods etc.
The master policy must state clearly that the funeral parlour or their agents are not employed by the underwriter/ insurer and are therefore not the underwriters of the policy, says the FSB.
If you have any complaints or queries these should first be directed to the Insurer. If you are not satisfied, you can report the complaint to the Long-Term Insurance Ombudsman or the Financial Services Board.
The details of the Ombudsman should be on the Membership Certificate.
Definition: An ombudsman is usually appointed by the government or by parliament but with a significant degree of independence, who is charged with representing the interests of the public by investigating and addressing complaints of maladministration or violation of rights.
The Ombudsman for Long-term Insurance (Ombud) is the regulator to approach for last avenue complaints on Funeral policies, i.e. after you have approached your policy provider / insurer.
The Ombud attempts to resolve complaints through mediation, recommendations and as a last resort, rulings on subscribing insurance members.
The Office of the Ombud is an independent scheme duly recognised as a financial ombud scheme in terms of the Financial Services Ombud Schemes Act.
97% of registered long-term insurers, by asset value, subscribe to the scheme and are therefore subject to their jurisdiction and bound by their rulings
Any policyholder, beneficiary, successor in title (e.g. a cessionary or an executor), premium payer or insured life who has a complaint against a subscribing insurer. If you are unsure, phone their office on 021 657 5000 or 0860 103 236.
The ombud commonly receives complaints or contractual disputes about communication / administration failures; mis-selling; lapsed policies; and alleged unfair rejection of claims.
The Financial Services Board (FSB) regulates insurers, intermediaries, retirement funds, friendly societies, unit trust schemes, management companies, and financial markets.
A registered insurance company is an entity that is registered with the FSB as an insurance company.
With regards to Insurance, the Registrar only deals with complaints about:
According to the FSB, conducting illegal insurance business means:
Only registered insurance companies are allowed to underwrite the risks of death for funeral policies and pay out claims.
To confirm whether or not an entity is registered by SA insurance law contact the FSB's Insurance Compliance Department on 012 428 8081.
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