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Funeral policy alert: FSB probing 17 schemes

Jan 19 2017 16:05

Cape Town – The Financial Services Board (FSB) on Thursday warned that it was investigating 17 entities selling funeral policies and cautioned the public to be wary when purchasing such policies.

The FSB said they started their investigation after it received complaints mainly from the members of the public.

The FSB said in a statement the schemes failed to provide proof that their funeral policies were underwritten by a registered long-term insurance company, as required by law.

"[We] afforded [them] 10 days to respond. The entities have either failed to respond to this request or have failed to confirm that their funeral policies are underwritten by a registered long-term insurance company," the FSB said.

"These entities will most likely continue to conduct unregistered insurance business and collecting money from the public. Since these policies are not underwritten by a registered insurance company, it cannot be guaranteed that the 'policyholders' will receive their benefits should they submit a claim," the FSB warned.

The 17 schemes under investigation are:

Phela Ke Phele (North West);
A.L.G Funeral Services (North West);
Zarra Funeral Home (Limpopo);
Zelda’s Wreaths and Coffins (Northern Cape);
Amohelang Family Support Scheme (Free State);
Lisakhanya Prepaid Funeral (Eastern Cape);
Noah Funerals (Eastern Cape);
TK’s Society (Gauteng);
Tladi Funerals (Gauteng);
Kotelo Funerals (Gauteng);
E.R.C Cebekulu (Gauteng);
Blue Rain Funeral Services (Limpopo);
Eastbridge Capital SA (Eastern Cape);
Tshepho Funerals Undertakers (Limpopo);
Bathopele Funeral Parlour (North West);
Sisa Daniels Burial Society (Eastern Cape); and
Olitsoe Funeral Services (Gauteng).

The FSB said it probes and takes action against entities who sell funeral policies to the public while the policies are not underwritten by a registered long-term insurance company.

"This conduct amounts to running unregistered insurance business thus breaching the provisions of the Long-term Insurance Act 52 of 1998.

"Entities (including their owners) that breach the provisions of the Long-term Insurance Act 52 of 1998 may be subject to a fine or imprisonment upon conviction."

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fsb  |  insurance
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