Four funeral businesses have signed undertakings with the FSCA in which they pledge to stop issuing funeral policies without underwriting them.
The FSCA investigated the entities and their directors on the suspicion that they were providing financial services without a licence and conducting insurance business without a licence.
The four businesses are: Greenway Burial Society in Bloemfontein, Mhlangaveza Family Assurance in Sandton, Motsepe’s Funeral Home in Ga-Rankuwa, and Retswelapele Funeral Services in Krugersdorp.
The Authority investigated the conduct of Greenway, Motsepe’s, and Retswelapele between 1 January 2020 and 31 October 2023. Mhlangaveza was investigated between 1 January 2022 and 30 May last year.
According to the Enforcement Undertakings, the directors admitted that their respective entities issued funeral policies and collected premiums without having a licensed underwriter, as follows:
- Motsepe’s issued policies to 4 606 clients and collected R14 million in premiums from 31 March 2021 to 31 December 2023. It also settled 800 claims valued at R12m.
- Greenway issued policies to 800 clients and collected R1 783 942 in premiums from 1 August 2022 to 31 October 2023. It also settled 51 claims valued at R238 000.
- Mhlangaveza issued policies to 50 clients and collected R240 000 in premiums from 1 January 2022 to 28 February 2024. It also settled six claims valued at R24 000.
- Retswelapele issued policies to 68 clients and collected R33 720 in premiums from 1 January 2020 to 31 October 2023. It settled 37 claims valued at R169 500.
The directors also admitted to contravening section 7(1) of the FAIS Act and section 5(1) of the Insurance Act.
In terms of the Enforceable Undertakings signed with the FSCA, Motsepe’s, Greenway, and Retswelapele agreed to:
- provide proof of their insurance business underwriting within 90 days from the date of signing the undertaking;
- ensure their representatives are added to the representative register of an FSP or an underwriter within 90 days from the date of signing the undertaking; and
- ensure their clients’ insurance business is placed with a licensed underwriter.
Mhlangaveza and its director undertook to regularise their business within 90 days from the date of signing the undertaking and ensure their clients’ insurance business is placed with a licensed underwriter.
The FSCA’s head of enforcement signed each of the agreements on 25 March this year.
The Authority reserved the right to sanction the entities and their directors if they do not adhere to the terms of the undertakings.
