“The Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA) (jointly referred to as the Authorities) have received requests for clarity in respect of the perceived regulatory inconsistency in the application of the maximum prescribed amounts as these amounts relate to the Funeral Class of insurance business. More specifically, the concerns raised related to the application of the maximum prescribed amounts that result in different outcomes for traditional insurers in contrast to micro-insurers, which creates uneven playing fields that are not justifiable, “according to Joint Communication 4 of 2020 release recently.
The purpose of the communication is therefore to:
|1.||Confirm the application of the maximum amounts prescribed under the –|
|○||Funeral Class (Class 4) of insurance business in Table 1 of Schedule 2 to the Insurance Act, 2017 (Act No. 18 of 2017) (Insurance Act), read with the Governance and Operational Standards for Insurers (GOI 7) and Microinsurers (GOM); and|
|○||definition of “microinsurance business” as per the Insurance Act.|
|2.||Confirm the regulatory status of funeral policies that provide benefits that exceed the maximum benefit amounts prescribed under the Funeral Class (Class 4) of insurance business in Table 1 of Schedule 2 to the Insurance Act, read with GOI 7 and GOM.|
|3.||Provide clarity regarding some related aspects of the regulatory requirements in the Policyholder Protection Rules (PPRs) made under the Long-term Insurance Act, 1998 (Act No. 52 of 1998) (LTIA) applicable to funeral policies.|
Click here to download the Joint Communication.