The Financial Sector Conduct Authority (FSCA) says it is looking into the circumstances that led to two members of the Mtshali family dragging the body of their deceased relative to an Old Mutual branch in KwaZulu-Natal, to protest against the delay in paying out their funeral claim.
A video went viral on social media showing Thandaza Mtshali and her aunt, Ntombenhle Mhlongo, taking the corpse of Sifiso Justice Mtshali, in a body bag, to Old Mutual’s offices in KwaDukuza (Stanger), demanding that their claim be paid out.
“We are interrogating the facts in this matter, and once we have concluded our assessment, we will take appropriate action where necessary,” the FSCA said in a statement yesterday.
“As the conduct authority for the financial sector, we exist to ensure that financial customers are treated fairly by financial institutions. While we do not resolve individual complaints, we do hold accountable any licensed entity that does not treat its customers fairly,” the FSCA said.
It said it had noted a call on social media for the cancellation of Old Mutual policies. The FSCA said although it understood the frustration felt by many, customers should not cancel their policies, as there were risks associated with such an action:
* Customers who cancel their life policy may find it difficult, if not impossible, to find new cover if they have developed a medical condition.
* A life policy taken out when you are younger is usually cheaper than a policy taken out when you are older. A new policy taken out by an older person may have higher premiums, and it may be difficult to obtain the same cover and limits.
* Early termination of an investment policy could attract charges, and these could also be payable on entering an alternative investment.
* There may be waiting periods attached to the new funeral cover.
“If a customer does decide to replace their policy, it is essential to first obtain a detailed comparison of the features and costs of the old and new policies, preferably with the help of a qualified financial adviser,” the FSCA said.
Old Mutual on Wednesday apologised for the delay in paying out the Mtshali family’s funeral claim.
In a statement, Old Mutual’s managing director of the mass and foundation cluster, Clarence Nethengwe, said the delay was not due to the company doubting that a death had occurred, but because the claim had been referred for further assessment.
The claim was lodged on November 11 and paid out on November 15.
“We are deeply sorry for the delay. We are committed to doing better, and we will be taking steps to accelerate and improve the way we verify those claims that need to be assessed further,” Nethengwe said.
“Although most claims are paid on time, and delays are rare, it is clear that we need to make our additional claims assessment processes easier and faster to ensure we do not let any of our customers down in their time of greatest need. While more than 99 percent of our valid funeral claims are paid out within the contracted 48 hours, we must strive to make that 100 percent.”