Secondary

Irregularity Reporting

A recent press release by the FSB named nine funeral services providers who appear to be acting outside of the law. Is it only the Regulator’s duty to expose such transgressors, or do we also have an obligation in this regard?

All funeral policies are required by law to 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.

Failing to comply with this requirement amounts to running an unregistered insurance business and is therefore in breach of the provisions of the Long-term Insurance Act 52 of 1998, and may be subject to a fine or imprisonment upon conviction.

These businesses were requested by the FSB to provide proof that they are underwritten by a registered long-term insurance company, as required by law, and were afforded 10 days to respond. All nine entities failed to respond in time.

Please click here to download the media release which also contains the names of the nine entities.

Last week, we referred two enquiries from a reader to the FSB. One concerns a company who runs a website soliciting leads for motor car insurance, and the other travel insurance.

One cannot expect the FSB to “patrol” the entire industry and smoke out potential transgressors. In our view, there is an obligation on all those who place a value on the integrity of the industry to report such matters.

This is not a call for those who suspect something amiss to flood us with enquiries. Please make use of the FSB’s formal complaint form, which you can download here.

There is also a facility for whistle-blowers who prefer to remain anonymous. Send an e-mail to fsb@tip-offs.com.

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