Regulatory Alerts2020-05-11
Joint Communication 4 of 2020: Clarification on Regulatory Requirements for Funeral Insurance Policies
The Prudential Authority and Financial Sector Conduct Authority issued Joint Communication 4 of 2020 to resolve perceived inconsistencies in the regulatory framework governing funeral insurance policies under the Insurance Act, 2017. The communication confirms that the R100,000 maximum benefit cap applies consistently per life insured across traditional insurers and microinsurers, allows excess benefits to be classified under the Risk Class, and includes rider benefits within prescribed limits. Insurers must align existing funeral policies with updated product standards by 1 July 2021, while annual limit escalations automatically track the consumer price index and waiting period waivers are strictly enforced to prevent adverse selection.
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