FSCA fines funeral home R11.4 million and debars owners for decades

Ina Opperman

By Ina Opperman

Business Journalist


Conducting financial services or insurance business without a licence is a criminal offence, while you can also be fined and debarred by the FSCA.


The FSCA has fined a funeral home R11.4 million and debarred the owners for decades after finding that they sold life insurance policies without being authorised and registered to do so.

According to a statement from the Financial Sector Conduct Authority (FSCA) it received complaints that Sanda Funeral Home and its directors, Zisanda Sanda and Sandile Michael Sanda were selling life insurance policies without being licensed as an insurer and rendering financial services without being authorised as a financial service provider.

When the FSCA investigated the complaints, its investigators found that Sanda Funeral Home and the Sandas were indeed issuing life insurance policies without the necessary authorisations in breach of section 7(1)(a) of the Financial Advisory and Intermediary Services Act and section 5(1) of the Insurance Act 18 of 2017.

Sanda Funeral Home has multiple branches in the Eastern Cape in Kariega, Sada, Langa, Kwanobuhle, Whittlesea and Port Elizabeth as well as Motherwell and Cape Town in the Western Cape.

ALSO READ: FSCA warns public against funeral insurers and investment companies

FSCA found Sanda Funeral Home sold funeral insurance without authorisation

The authority says Sanda Funeral Home and the Sandas sold funeral insurance policies to the public where policyholders paid monthly premiums. In return it provided funeral services as insurance benefits upon the death of the insured.

Due to the contraventions of the Financial Advisory and Intermediary Services Act as well as the Insurance Act, the FSCA imposed a penalty of R11 495 001 on Sanda Funeral Home and debarred Zisanda Sanda for 20 years and Sandile Sanda for 10 years.

The sanction means that they are debared from providing, or being involved in the provision of financial services, acting as a key person of a financial institution and providing specified financial services to a financial institution, whether under outsourcing arrangements or otherwise.

ALSO READ: FSCA fines Middelburg insurance broker R1 million and debars her for 15 years

FSCA also warns consumers about Malachi Funeral

The FSCA also has warned consumers to be cautious when conducting financial services business with Malachi Funeral.

According to the authority it received a complaint that Malachi Funeral was offering life insurance policies (funeral policies) to members of the public without being underwritten by a licensed insurer.

“While not commenting on Malachi Funeral’s business or product offering, the FSCA emphasises that any company issuing insurance policies in South Africa must be authorised by the FSCA and the Prudential Authority (PA),” the FSCA says.

“Malachi Funeral is not authorised and does not hold a licence from the FSCA and/or the PA to conduct financial services and/or insurance business.”

ALSO READ: Prudential Authority and FSCA reviewing regulations for funeral insurance

FSCA stresses risk of doing business with unlicensed entities and individuals

The authority stresses the risk of doing financial services and insurance business with entities that may be operating without the necessary licences. It advises consumers to always check that an entity or individual is authorised by the FSCA and the PA to provide financial products and services and/or insurance policies.

ALSO READ: Considering taking out a funeral policy? Here’s how to avoid getting scammed

How to check with the FSCA if a business is legitimate

The FSCA says consumers should always verify:

  • That an entity or individual is authorised by the FSCA to provide financial products and services, including giving recommendations how to invest;
  • What category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products; and
  • That the financial service provider (FSP) number the entity or individual offering financial services uses matches the name of the FSP on the FSCA database.

Consumers can confirm the status and FSP number of a service provider or a person who claims to be an authorised service provider by calling the FSCA on its toll-free number, 0800 110 443. You can also do an online search for an authorised financial institution by licence category at https://www.fsca.co.za/Regulated%20Entities/Pages/List-Regulated-Entities-Persons.aspx or do an online search for a financial institution that is an authorised FSP in terms of the FAIS Act at https://www.fsca.co.za/Fais/Search_FSP.htm.

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