The FAIS Ombud has published two more determinations against Luvuyo Burial and Consulting (Pty) Ltd, bringing to five the rulings in favour of the funeral service provider’s policyholders this year.
In all five cases, the complainants submitted valid claims but received only partial payments even after the FAIS Ombud intervened and Luvuyo undertook to settle the amounts due.
On 13 June, the Ombud’s Office released the two determinations it issued against Luvuyo on 8 April, which followed a determination in January.
The Financial Sector Conduct Authority suspended Luvuyo’s licence on 14 April after the Ombud, Advocate John Simpson, referred the determinations to the Authority.
In all five determinations, Simpson noted that Luvuyo was operating without an underwriter.
Sanlam Developing Markets became the scheme’s underwriter on 1 January 2020, but the relationship was terminated on 1 May 2021.
The Ombud’s Office asked the FSCA whether it had information about Luvuyo’s new underwriter. “It advised that this information could not be provided. The respondent verbally confirmed that it currently has no underwriter,” the determinations stated.
Read: FSCA suspends FSP’s licence after third Ombud determination
Luvuyo, which is based in Khayelitsha in the Western Cape, was registered as a company in 2014 and obtained its FSP licence in 2016.
On Friday, the Office released two more determinations made against Luvuyo in April.
Policyholders not paid out in full
One of the complainants, Pumelele Mantingani, took out a funeral policy with Luvuyo in September 2020, with her uncle as the life insured. Mantingani submitted a claim after her uncle died in July 2024.
Luvuyo acknowledged the claim and committed to making payment, but only partially honoured the obligation, paying R5 000 of the R10 000 due. Despite further assurances, the balance remained unpaid.
The Ombud’s Office made numerous attempts to resolve the matter amicably. Although Luvuyo undertook more than once to settle the outstanding balance, it failed to do so.
In his determination on 8 April, Simpson ordered Luvuyo to pay Mantingani R5 000, plus interest at 11.25% a year from the date of the determination until the date of final payment.
The second complainant, Neliswa Kondile, had a funeral policy with Luvuyo. In September 2020, she added her mother-in-law as one of the lives insured. Following her mother-in-law’s death in November 2023, Kondile submitted a funeral benefit claim for R10 000.
Luvuyo acknowledged receipt of the claim via SMS in December, but despite numerous follow-ups by Kondile through calls and emails, the matter remained unresolved for several months.
Following the Ombud Office’s intervention, Luvuyo agreed to settle the claim in monthly instalments: R3 000 each in January and February 2025, and a final payment of R4 000 in March 2025. However, only the first instalment was paid, leaving R7 000 due.
In his determination on 15 April, the Ombud ordered Luvuyo to pay Kondile R7 000, plus interest at 11.25% a year from the date of the determination until the date of final payment.
PPR and TCF non-compliance
As in his previous determinations, Simpson found that Luvuyo failed to comply with Rule 2A.8.1 and Rule 2A.8.2 of the Policyholder Protection Rules (PPR) issued under the Long-term Insurance Act.
Rule 2A.8.1 mandates that an insurer must, within two business days of receiving all required claim documents, “(a) assess and make a decision whether or not the claim submitted is valid, and (b)(i) authorise payment of the claim; (ii) repudiate the claim, or (iii) dispute the claim and notify the claimant of the dispute”.
Rule 2A.8.2 further requires that disputed claims be resolved within 14 business days.
Additionally, Simpson found that Luvuyo’s actions contravened the Treating Customers Fairly (TCF) principles.
TCF Outcome 6 stipulates that “customers do not face unreasonable post-sale barriers when they want to change a product, switch providers, submit a claim, or make a complaint”.
In both cases, the complainants faced significant obstacles in securing their rightful benefits.
Simpson determined that Luvuyo was contractually liable for the payment of the claims in both cases. The provider’s failure to process the claims promptly and fully, despite receiving all the necessary documentation, breached its obligations under the funeral policies.