COVID-19: FUNERAL POLICY PREMIUM COLLECTION IN SOUTH AFRICA
FSCA Communication 14 of 2020 (Communication) emphasises the need for insurers and financial services providers to treat policyholders with empathy, flexibility and understanding during these unprecedented times which is embodied in the Treating Customers Fairly framework.
The Communication focuses on the culture and responsibilities of insurers and financial services providers in respect of premium collection of funeral policies during the COVID-19 crisis.
The Communication is directed at funeral parlours, who are also carrying on business as financial service providers, who have collected premiums in such a manner that compromises the safety of policyholders and not in the spirit of the Regulations to the Disaster Management Act 2002, published by Government (Regulations).
The FSCA acknowledges the importance of premium collection; however, it directs funeral parlours that collect cash payments for premiums to do so in terms of the Regulations, especially with regard to social distancing, and where possible, to encourage electronic payments from clients.
Insurers are also reminded that the Policyholder Protection Rules provide for a grace period where clients have not paid premiums on their due date; insurers have been directed to notify policyholders in this regard.