Lion of Africa Life Assurance has commented on both social grant deductions and the Minister of Social Development’s recent statement as follows:
Lion of Africa Life Assurance welcomes the Minister of Social Development’s statement of 6 May 2016 regarding deductions from social grants. In her statement, the Minister provided clarity that deductions from social media grants may only be made in respect of funeral policies issued by registered life assurance companies and that they may only be applied to adult grants.
We are pleased that the core elements of Regulation 26A of the Social Assistance Act, 2004, remain intact. The fact that policyholders in this space will continue to deal with legitimate licenced insurers only, will continue to have a 10% ceiling in respect of the ratio of premium to the grant and that the applicant may only have one policy, is in line with our practice and has our full support.
We also thank the Minister for being so thorough in the statement. It is our understanding that Regulation 26A has been very beneficial for the purchase of funeral benefits – which are much needed. All sectors of society have to bury loved ones and all would like to be able to do so with some dignity. Any doubt that was cast on the applicable regulations in the last few months has been cleared up by the Minister and is in line with our expectations and understanding.
We also wish to clarify the reference to Lion of Africa Life in the Minister’s statement. The company has designed a policy that is distributed on an intermediary basis and Emerald Life is part of that sales channel. We have a combination of internal reps, tied agents and other intermediaries that distribute products.
However, since the moratorium on this was introduced in December 2015, Lion of Africa Life has not processed any deductions from child support grants. The Minister’s statement on 6 May 2015 clarifies that such policies may no longer be sold, so Emerald Life will not be able to sell a funeral policy to child grant recipients on behalf of Lion of Africa Life at all. As an industry intermediary, Emerald Life will be able to sell other Lion of Africa Life policies.
The policies referred to in the statement were not written or underwritten by Lion of Africa Life – they were sold prior to our entry into the market – and we are unable to comment further on them. However, when applicants deal with legitimate and licenced providers and have the protection of 26A, they can be assured of the correct recourse if there is ever a problem.
It should be noted that, in the event of any problem with any insurance product sold, a licenced long term insurer must take corrective measures. This is not restricted to grant beneficiaries but to any policyholder who has a complaint. All policyholders – irrespective of the origin of the funds to purchase the policies – have a right to complain to the insurer and, if satisfaction is not provided, to the Long term Insurance Ombudsman. Specifically, dealing with a registered insurer ensures this right of recourse and protection.
In addition, any policyholder – again, irrespective of the origin of the funds to purchase the policy – has the right to cancel the policy at any time.