State enforces rules on funeral parlours
THE financial services regulator is cracking down on funeral undertakers who do not comply with rules governing their business.
South African Funeral Practitioners Association president Sammy Leshabane said licences of at least 17 of its members were cancelled recently. He conceded the figure could be much more.
A Gau-West Funeral Undertakers executive - the area covers Roodepoort to Carletonville - said six of its members had suffered the same fate because of non-compliance.
Gau-West is conducting workshops in a bid to save its members from closure.
New demands by the Financial Services Board (FSB) include having an insurance underwriter to make sure clients are properly covered.
Spokesman for FSB Logan Ramalu said yesterday the board had threatened to close six undertakers because they are "fly by nights".
Ramalu said all undertakers must be underwritten by an insurance company or face closure. "In terms of the Long-term Insurance Act, all funeral schemes or parlours that provide funeral insurance benefits must be underwritten by a registered insurance company," he said.
"The Act contains specific provisions designed to ensure that if somebody makes a promise to provide funeral benefits in the future in return for the monthly payment of a premium, then that entity must have sufficient funds available to meet that promise at all times."
Ramalu said the Act also contained policyholder protection provisions to ensure that individuals were treated fairly when they claimed.
"The danger of funeral insurance being offered by persons that are not underwritten is that there is either no guarantee that the funds will be available to pay for the funeral when needed, or people do not receive a fair benefit when the need for the funeral assistance arises."
Some of the companies facing closure are Simon and Jones in Eastern Cape, Florainville Funeral Directors in Northern Cape, Thaba Funerals in Free State, Multi First Class Funeral Directors in KwaZulu-Natal, La Jean Funeral Home in North West and Luncedo Burial Society in Western Cape.
"They failed to respond timeously or failed to confirm that they are underwritten by a registered long-term insurance company and have been given 21 days to rectify this or be shut down," Ramalu said.
He said investigations into these companies were triggered by different reasons.
"Compliance with the Long-term Insurance Act is a prerequisite and there will not be any exception for non-compliance, even if someone has money."
But Leshabane and his members are unhappy. "We believe the move by the state to appoint the FSB as our watchdog was a wrong move because the board treats us like the insurance companies and not funeral ones."
Funeral parlour blitz
State enforces rules on funeral parlours
THE financial services regulator is cracking down on funeral undertakers who do not comply with rules governing their business.
South African Funeral Practitioners Association president Sammy Leshabane said licences of at least 17 of its members were cancelled recently. He conceded the figure could be much more.
A Gau-West Funeral Undertakers executive - the area covers Roodepoort to Carletonville - said six of its members had suffered the same fate because of non-compliance.
Gau-West is conducting workshops in a bid to save its members from closure.
New demands by the Financial Services Board (FSB) include having an insurance underwriter to make sure clients are properly covered.
Spokesman for FSB Logan Ramalu said yesterday the board had threatened to close six undertakers because they are "fly by nights".
Ramalu said all undertakers must be underwritten by an insurance company or face closure. "In terms of the Long-term Insurance Act, all funeral schemes or parlours that provide funeral insurance benefits must be underwritten by a registered insurance company," he said.
"The Act contains specific provisions designed to ensure that if somebody makes a promise to provide funeral benefits in the future in return for the monthly payment of a premium, then that entity must have sufficient funds available to meet that promise at all times."
Ramalu said the Act also contained policyholder protection provisions to ensure that individuals were treated fairly when they claimed.
"The danger of funeral insurance being offered by persons that are not underwritten is that there is either no guarantee that the funds will be available to pay for the funeral when needed, or people do not receive a fair benefit when the need for the funeral assistance arises."
Some of the companies facing closure are Simon and Jones in Eastern Cape, Florainville Funeral Directors in Northern Cape, Thaba Funerals in Free State, Multi First Class Funeral Directors in KwaZulu-Natal, La Jean Funeral Home in North West and Luncedo Burial Society in Western Cape.
"They failed to respond timeously or failed to confirm that they are underwritten by a registered long-term insurance company and have been given 21 days to rectify this or be shut down," Ramalu said.
He said investigations into these companies were triggered by different reasons.
"Compliance with the Long-term Insurance Act is a prerequisite and there will not be any exception for non-compliance, even if someone has money."
But Leshabane and his members are unhappy. "We believe the move by the state to appoint the FSB as our watchdog was a wrong move because the board treats us like the insurance companies and not funeral ones."
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos