Public warned against unregistered funeral policies

web_photo_candle_031113

Local media reports claimed the death toll could be higher, claiming that up to 28 people had been killed in the stampede at a vigil at St Dominic's Catholic Church.

JOHANNESBURG - The Financial Services Board (FSB) yesterday warned the public to be cautious about purchasing funeral policies, advising people to check that policies they buy are underwritten by registered long-term insurance firms as required by law.

The board provides lists of authorised financial services providers via its website (www.fsb.co.za) and a toll-free number (0800-110-443), and it advised people to check if they are dealing with an authorised party before buying funeral policies or other insurance products.

“Policyholders must receive a copy of their policy document, which must bear the name of the long-term insurance company underwriting the funeral policy,” the board said.

The board issued two statements yesterday regarding its investigations into funeral policies.

In the first, it advised the public not to conduct any business with Mitpo Building Society, which it said was an unregistered entity selling funeral policies in Mahikeng.

“The entity is also neither a registered long-term insurer nor a licensed financial services provider in terms of the law, and is therefore conducting an unregistered insurance business and consequently, policyholders are not protected.

“The FSB has, on several occasions, requested Mitpo to provide proof of underwriting but to date the entity and its owner have failed to provide the requested proof,” the board said.

In the second statement yesterday, the board listed nine funeral policy sellers who failed to furnish it with proof that they were underwritten by a registered long-term insurance company within 10 days, as requested.

The board advised the public not to buy funeral policies from Faizel Dollie Funeral Home, Clarinise Funeral Services, Abomelezi Funeral Services, Speelman Family Funeral Home, City Funerals, Holy Cross, Maphutha Dihuswana Funeral Group, Tshwaragano Funerals and Omega Funeral Services.

“The law requires that all funeral policies must be underwritten by a registered long-term insurance company. This is to ensure that policyholders and their beneficiaries are paid their benefits when they claim,” the statement said.

The board investigates and takes action against entities that sell funeral insurance policies to the public while such policies are not underwritten. This amounts to running an unregistered insurance business and is therefore in breach of the provisions of the LongTerm Insurance Act of 1998.