Amendments to South Africa’s insurance legislation which came into effect on July 1 aim to give more people the opportunity to cover themselves and their assets, and will provide for greater protection for policyholders, including a 48-hour turnaround time for funeral payouts, an industry official has said.
The treasury last week announced the commencement of the Insurance Act of 2017 which establishes a legal framework for the prudential regulation and supervision of insurers and insurance groups, and which it said would “ensure the safety and soundness of insurers, enhance the protection of policyholders and potential policyholders, promote broad-based transformation of the insurance sector, and contribute to the stability of the financial system in general”.
The new law will give insurers a “blank canvas” to roll out innovative products subject to product standards to protect customers, such as the maximum term cover that can be provided and shorter waiting periods, said Johan Ferreira, legal and compliance officer for Africa Unity Life.
Important changes for micro-insurers include a limit of R100 000 for life insurance and R300 000 for non-life insurance, while the maximum benefit for funeral policies offered by both micro-insurers and traditional insurers will be capped at R100 000 to ensure that policyholders are afforded the same protection.
Consumers will now have a range of micro-insurance products to select from if they want to manage their assets, Ferreira said.
“South Africa is a unique country and we need something unique in order for everyone to manage their own risk no matter how rich or poor you are,” he said.
“The Insurance Act and the micro-insurance product standards under the new policyholder protection rules will make this a possibility.”