Johannesburg - The Financial Services Board (FSB) on Thursday warned members of the public against individuals offering dubious funeral policy covers.
“The FSB is investigating nine entities selling funeral policies and continues to warn the public to be cautious when purchasing such policies,” spokeswoman Tembisa Marele said in a statement on Thursday.
The businesses are in five provinces.
They were asked by the FSB to provide proof that they were underwritten by a registered long-term insurance company, as required by law, and afforded 10 days to respond.
“The businesses have either failed to respond to this request or have failed to confirm that they are underwritten by a registered long-term insurance company.”
She said the purpose of funeral insurance was to provide cover to help pay for funerals.
The law required that all funeral policies 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. Policyholders must receive a copy of their policy document, which must bear the name of the long-term insurance company which is underwriting the funeral policy,” she said.
Marele said the FSB investigated and took action against entities who sold funeral insurance policies to the public when such policies were not underwritten.
“Such conduct 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,” she said.
The companies under investigation are Faizel Dollie Funeral Home in the Western Cape; Clarinise Funeral Services in Orlando, Gauteng; Omega Funeral Services in Randfontein, Gauteng; City Funeral Fund t/a City Funerals Ramguiness Funeral Centre in Lenasia Extension two, Gauteng; Abomelezi Funeral Services CC in the Eastern Cape; Speelman Family Funeral Home in Port Elizabeth; Holy Cross, in Coldstream, Eastern Cape; Maphutha Dihuswana Funeral Group in Witbank, Mpumalanga; and Tshwaragano Funerals in North West. - Sapa