The Financial Sector Conduct Authority (FSCA) expressed concern over the high premium increases implemented by insurers on funeral policies.
While the financial watchdog says it recognises the impact of Covid-19 on mortality rates and funeral policy claims, it reminded insurers of their obligations on premium increases, noting that it still expects insurers to ensure fair outcomes for policyholders.
“Insurers must ensure that in line with Rule 1.2 of the Policyholder Protection Rules (PPRs) issued under Section 62 of the Long-term Insurance Act, 52 of 1998 (LTIA), they act with due skill, care and diligence when increasing premiums,” the FSCA said in a statement.
“It is the view of the FSCA that premiums must be priced correctly at the inception of the policy so that any increases which may be implemented would still result in fair outcomes for policyholders, with the policy continuing to perform as expected.”
The regulator adds that it has received complaints that some insurers are increasing premiums more than once for the same policy within a 12-month period, even though the terms and conditions allow only for increases on the anniversary of the policy.
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