The case revolves around different interpretations of a change in legislation covering funeral group schemes in the insurance industry. File picture
The case revolves around different interpretations of a change in legislation covering funeral group schemes in the insurance industry. File picture

Both sides awaiting reserved judgment in funeral policy insurance cover case

By Mwangi Githahu Time of article published Dec 3, 2021

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Cape Town - Stellenbosch-insurance underwriter KGA Life is awaiting the outcome of an application filed in the Eastern Cape High Court in which it has been sued by a Gqeberha funeral insurance business, Multisure Corporation, and accused of bullying tactics.

Multisure brought the application after KGA Life refused to co-operate after the cancellation of an agreement between the two companies.

The case revolves around different interpretations of a change in legislation covering funeral group schemes in the insurance industry.

Multisure had cancelled the agreement and was moving its book of funeral policy clients to a different underwriter in July this year.

Multisure chief executive Denton Goodford said the clients included a considerable number of Sassa clients who had been provided with funeral policies by Multisure under its group scheme, which was then in place with KGA Life.

“Initially, KGA had no problem with our cancellation of the underwriting agreement with them, but at the last minute they made a complete turnaround and refused to co-operate, citing new legislation for not being able to do so.”

Reached for comment, KGA Life’s legal affairs spokesperson Rudi Kotze said that while the matter was heard in October, judgment was reserved.

“We are awaiting the outcome. In addition, the parties have engaged with the FSCA , who are fully conversant with the matter, on a regular basis.

“To this end we confirm that KGA Life has at all times acted in accordance with the legislative and regulatory provisions put in place to protect policyholders.

“Moreover, we confirm that each policyholder or beneficiary for whom KGA Life received a valid claim has in fact received the benefits,” Kotze said.

The FSCA recently received a memorandum of grievances from the National Funeral Association of South Africa which represents funeral directors.

Among issues raised in the memorandum included underwriting requirements, and various complaints about some of the provisions of the Insurance Act of 2017.

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Cape Argus

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