Sanlam defends funeral insurance deductions from grants

Life insurer Sanlam has defended its practice of making funeral policy deductions from social grants, noting these deductions are in line with regulations and that the policies are offered to consenting adults. Social grant deductions are one of several payment mechanisms designed to provide “ease of payment and convenience”, as well as access to financial services to policyholders, notes Jurie Strydom, deputy CEO of Sanlam Personal Finance.

In terms of the Social Assistance Act, funeral policies qualify as the only legal deduction against a social grant, provided they are issued by a registered insurance company and do not exceed 10% of the value of the grant.

Following a “clean-up project” by the South African Social Security Agency (Sassa), which administers these grants, to “regularise unlawful funeral premium deductions”, Regulation 26A of the Act was amended earlier this month. In particular, deductions may no longer be made from child support grants, among others, after it emerged during Sassa’s investigations that funeral policies had been sold to the adult recipients of these grants, who were paying for them using grant money intended for the child.

In addition, the beneficiary of the grant must consent to the deduction in writing and submit the consent in person to Sassa or, where such is not possible, make alternative arrangements. The Agency is concerned that written consent obtained by insurance companies from beneficiaries may be fraudulent or ill informed.

Sanlam, however, argues that its policy forms include direct requests from beneficiaries to Sassa that deductions are made. It further argues that Sassa, which holds no financial advice licence, does not have power in terms of any regulations to investigate contracts for funeral insurance taken out by beneficiaries.

While Sanlam says it supports government’s efforts to clean up the grant deductions landscape, it notes in court papers that Sassa has submitted no evidence of complaints from grant beneficiaries that deductions for funeral insurance premiums are unlawful. “The papers are replete with complaints from beneficiaries about unlawful deductions for airtime, loan repayments, electricity and water charges,” Sanlam says. Funeral insurance, on the other hand, offers tremendous social value, Sanlam argues.

The Department of Social Development has recognised the important role that funeral insurance plays in the lives of the majority of grant recipients, according to Sanlam, which cites estimates from the department that poor households can commonly spend more than 15 times their monthly household income on a funeral.

“Funeral insurance enables poor households to provide for funerals in a structured manner that prevents financial ruin in the event of a member passing away. Its social value cannot be doubted,” Sanlam submits in court papers.

Strydom notes that Sanlam respects Sassa’s decision “to withdraw the right of beneficiaries of child grants to make use of deductions from child grants to pay funeral policy premiums”. “The impact of the moratorium on Sanlam’s financial performance is immaterial. Where a policyholder has elected to make use of a social grant deduction, Sanlam does not have access to information on the nature of grant. Sassa has until now not required that a distinction be made between grants that qualify for deduction and those that do not,” Strydom noted. He said that policyholders impacted by the changes would be given an opportunity to make use of alternative payment mechanisms, such as cash and debit orders.

Sanlam is currently engaged in court action with Sassa over the correct implementation of Regulation 26A, which action was recently postponed following the amendment to the regulation.

Sanlam believes that if correctly implemented, Regulation 26A obliges Sassa to make funeral insurance deductions from grants before they are paid into beneficiary bank accounts. This allows permissible deductions to be managed under Sassa’s control, Sanlam argues, removing these deductions from the debit order environment, which is where “defrauding and exploitation of grant beneficiaries occur”, it says.

Government says stop selling insurance to the poorest people!

South Africa’s government said it plans to protect the country’s poorest people by stopping insurers from selling funeral cover to welfare recipients.

The companies that could be impacted include Sanlam, the biggest insurer based in South Africa, and Lion of Africa Assurance Co. They are among companies selling funeral cover that is paid for from welfare grants meant for children. Other companies sometimes draw money from social grants for other services, a practice which is illegal.

The government will replace private schemes with a state-run funeral plan, Minister for Social Development Bathabile Dlamini said in a speech to parliament on Wednesday. “The absence of a funeral benefit has opened our social grant beneficiaries to exploitation by private-insurance companies,” Dlamini said. “The lack of government action to protect them has led to a very loud outcry by our beneficiaries and various civil-society organizations.”

Sanlam and Lion of Africa are both trying to maintain the current system through separate court cases being heard this month. About 16.9 million people are on welfare, more than the number in work. That’s part of the post-apartheid government’s attempt to reduce poverty and narrow inequality in a nation with one of the world’s biggest gaps between rich and poor. About 70% of the grants are for children.

While the government can stop deductions being made before the grants go into a recipients’ account, it will struggle to implement a complete ban on the practice, Lion of Africa CEO Paul Myeza said by phone.  “It doesn’t dramatically change the landscape,” Myeza said. “Those members can buy policies like anyone else. It’s an open market.”

While Lion of Africa won an interdict against a moratorium stopping all new deductions from child grants, Sanlam said it had complied with the measure. Its case, to be heard on May 10, seeks to clarify how a process to clean-up the industry is implemented.

“Sanlam supports the new moratorium and we’ve applied it as of December 1,” Jurie Strydom, the deputy CEO of its Sky division, said by phone on Thursday. “Sanlam is not party to the legal action taken by Lion of Africa Assurance.”

The law currently allows deductions from social grants for a single funeral insurance policy amounting to a maximum of 10% of the grant. Many on welfare complain that there are many deductions being made for funeral cover and other services without them being aware that they signed up for them, according to the government.

Minister Dlamini will on Friday announce new measures to end all deductions from social grants, her spokeswoman Lumka Oliphant said by phone..

Lion of Africa calculations show there’s a risk of between 30% and 156% of a funeral policy payout, because as many as eight people can be covered by a family policy, according to its actuarial head EC du Toit.

© 2016 Bloomberg

Cohabitation

Cohabitation, also referred to as a common law marriage, living together or a domestic partnership, is not recognised as a legal relationship by South African law. There is, therefore, no law that regulates the rights of parties in a cohabitation relationship. Cohabitation generally refers to people who, regardless of gender, live together without being validly married to each other. In the past, these relationships were called extramarital cohabitation. Put simply, men and women living together do not have the rights and duties married couples have. Because their relationship is not recognised by the law as a marriage, the rights and duties that marriage confers do not apply. This is the case irrespective of the duration of the relationship. Therefore contrary to popular belief, the assumption that if you stay with your partner for a certain amount of time a common law marriage comes into existence whereby you will obtain certain benefits is incorrect. In South Africa, cohabitation has become more common over the past few years and the number of cohabitants increases by almost 100 per cent each year.

Unlike marriage, which is regulated by specific laws that protect the individuals in the relationship, cohabitation offers no such comfort. For example, when a cohabitant dies without a valid will, their partner has no right to inherit under the Intestate Succession Act. A cohabitant can also not rely on the provisions of the Maintenance of Surviving Spouses Act to secure maintenance on the death of a partner. Furthermore, there is no obligation on cohabitants to maintain each other and they have no enforceable right to claim maintenance. South African banks normally do not allow joint accounts for cohabitants. An account will usually be opened in one partner’s name, but giving the other partner co-signing rights.

Inheritance

There is no right of intestate succession (when someone dies without a will) between domestic partners, no matter how long they have lived together. A partner is not automatically regarded as an heir or dependant. The rules of intestate succession as set out in the Intestate Succession Act, 1987, are clear. In the event of there being no valid will, the beneficiaries are, in the first instance, a spouse or descendants or both. In the event of there being no spouse or descendants, the estate devolves upon other more distant members of the bloodline.

If the surviving partner is not named in a will, he/she will be faced with the monstrous task of having to prove his/her specific contribution to the joint estate before entitlement will be forthcoming. Proving actual contribution is often extremely difficult, especially when a partner has died. Litigation is usually lengthy, costly and unwelcome, particularly at a time already fraught with emotional trauma. This problem is exacerbated if the deceased had not divorced a previous spouse. In law, the first spouse clearly has the leverage to proceed and claim the entire estate.

Home Affairs Issues

Section 22A (5) of the Births and Deaths Act stipulates that NO funeral undertaker who has not been designated shall engage in the activities relating to the registration of deaths.

More than one person from a funeral parlour can receive a designation number. It is recommended that each person at a branch or staff members who do registrations be designated. When a staff member leaves your service, write a letter to the DG to inform them to remove the person.

Requirements for designation:

– An application form to be completed

– Certified copy of ID

– Certified CoC

– Business licence (where applicable)

– Recent valid tax registration certificate issued by SARS

– Proof of registration with an association

– SA citizen 18 years or older

– Not employed by DHA

– Have knowledge of the Act by completing written assessment conducted by DHA .

IMPORTANT: Please contact Elsabe Basilio at hatfeild@mweb.co.za or 082 894 4487 within the next week if you have been experiencing any problems to obtain burial orders or re a shortage of the DHA 1663 forms.

ASSUMPTIONS ABOUT FUNERAL DIRECTORS

1.We’re all creepy, gothic, soulless people who love death.

No one in the funeral profession likes death. It’s just the career path that we’ve chosen to follow… and most of the time it’s because we felt a calling to help make funerals a better, more healing experience for families. In addition to tending to people who have passed away, a large part of what we do is tending to families, helping them put on a beautiful service for someone that meant a lot of them, and helping them navigate such a difficult time. You simply can’t be a successful funeral director without a lot of passion and care for the people that walk through our doors.

 

2. We only care about money and benefiting ourselves.

Let me tell you… if funeral professionals wanted a job where we hoped to become filthy rich, have loads of time off, and only focus on our own needs… we wouldn’t have become funeral professionals.

The truth of the matter is, funeral directors work long, hard (and often thankless) hours making sure that everything is absolutely perfect for the families that we serve. We bend over backwards to make sure that everything goes perfectly… even if that sometimes means losing money or working extra hours over a holiday weekend. (Families might be surprised to find out just how normal of a situation those are.) And, as I mentioned above, we do it because we genuinely want to make a difference to the people walking through our funeral home’s door.

 

3. We’re focused on selling clients the most expensive options

Funerals are a business, just like any other service that you seek out in a time of need. But, unfortunately, most people do not see the value behind the services that funeral professionals offer, like they do with, say… a wedding (another common life celebration event).

Instead, people are shocked to find out that a funeral costs money… and they’re usually not cheap. But do you really want your loved one to be sent off in a bare bones or “cheap” service, where you’ve only spent the bottom dollar possible? If so, that’s your prerogative. But we take pride in helping families create a service that celebrates the life lived. And that doesn’t necessarily mean the most expensive option, but whatever option feels right to our families. In fact, maybe the best option just happens to be the least expensive option – we’re more than happy to build a service around what our families want.

 

4. We just use the same “one-size-fits-all” funeral service for every family, because it’s easiest for us

Sure, it would be easier if funeral professionals were able to just use the same service over and over again, never having to come up with any new ideas. But how would that help our families celebrate the unique and personal life of their loved one?! Every person lived a different story, and we believe that story deserves to be told. Which is why we work so hard creating a beautiful, personalized service that truly honors and memorializes the life that was lived… even when that means finding a unique song, scripture, quote or story for every single service we hold.

Source: connectingdirectors.com

NFDA & Genlife agreement

The NFDA and Genlife Financial Services have signed an agreement whereby all members of the NFDA joining Genlife as from 1 July 2015 will in fact be contributing to the strengthening of their Association. Genlife has a sincere appreciation for the educating role (amongst others) the NFDA is playing within the funeral industry and would like to see the message of the NFDA advocated more rigorously. As a funeral group scheme administrator Genlife has invested heavily in processes that assist funeral directors in managing and growing their business. Funeral directors can now grow their business outside of their traditional operating area by making use of the Online Policy Application Facility that can be downloaded onto the website of all participating members. This is a complete online policy application function from quote stage to application stage. The development has been done in such a way that the online application is promoted as a facility offered by funeral directors to their clients and is not introduced as a Genlife function. The Genlife call centre is responsible to call all clients on behalf of the participating funeral director and the required voice logging process is completed by the call centre. Genlife is currently underwriting with Sanlam, Safrican, KGA and Metropolitan. Genlife is also assisting the NFDA in various other areas such as arranging golf days.

Genlife is a well-established Funeral Group Scheme Administrator and would appreciate an opportunity to provide members of the NFDA with a quotation for underwriting their business. Interested funeral directors can call the office at Pretoria 012 450 5581 or Lorraine at 082 338 3993.

Enquiries can be sent to admin@genlife.co.za – www.genlife.co.za. Their rates are extremely competitive and combined with their web based funeral administration software, excellent service and competent staff Genlife can offer you service beyond expectation.

NFDA CONSTITUTION – CONDITIONS OF MEMBERSHIP

PLEASE STUDY THE FOLLOWING CAREFULLY TO MAKE SURE YOU ADHERE TO THESE CONDITIONS:

Members and prospective members need to comply with the following requirements, as applicable to their category of membership:

  • They have all licences/permits required by law for the operation from their premises of funeral services; including any required by any Health Department or other government department or competent authority;
  • They provide the names, addresses and ID numbers of the owner, company directors, CC members, or partners (as the case may be); and if registered as a company or close corporation they shall provide a certified copy of the certificate of registration/incorporation. In the event of a change of ownership, they need to provide new information within sixty (60) days, to facilitate continuity of membership, failing which membership will lapse;
  • Should an existing Full or Limited Member open an additional office, (whether operational or non-operational) the members shall, within 60 days of the opening of that office, apply for membership of the NFDA for that office. Should a Full or Limited Member close an office, the member shall, within 60 days of closure, cancel in writing the membership of that office and shall return all NFDA property relating to that closed office;
  • They agree to be bound by the inter company tariffs set by the NFDA and the Funeral Federation of South Africa (‘FFSA’). Should a non-member of the NFDA or FFSA make use of a Member’s mortuary facilities, that non-member shall also be bound by all NFDA and FFSA agreements relating to inter-company charges: (a) The non-member may only charge NFDA/FFSA rates to other funeral directors (being NFDA/FFSA members) for removals and related services. (b) However, the non-member is not entitled to any benefits of NFDA or FFSA membership, such as preferential removal rates, whether or not the removal is done by the host NFDA Member (on behalf of the non-member);

Full Members (National) and Limited Members (i.e. membership categories for funeral directors), who fall within the boundaries of an established region of the NFDA, are expected to attend at least one general meeting (regional or national) of the NFDA per calendar year, to remain in good standing. The Regional or National Executive of the NFDA may, at their discretion, for good reason, absolve a Member of this obligation for a particular calendar year.

FSB communication forum to be established

The FSB invited all interested parties to a meeting on 10 June, where a Communication Forum was proposed as a networking platform to improve communication channels between the Board and funeral parlours.

Funeral parlours that do not belong to an association but have an influence on other funeral parlours in their area as well as associations, will nominate people who will form part of the communication champions. These communication champions will be the eyes, ears, hands and legs of the regulator to assist in identifying concerns from colleagues (other funeral parlours around their areas), assist and support new joiners and or organise training sessions with FAIS Training Facilitators.

It was agreed that the nominations will have to be regional instead of provincial due to the fact that some associations are not represented provincially or nationally. Each and every association attending was given a nomination form and Licence Application Guide for the Communication Champ they are going to nominate. The nominated must familiarise themselves with the guide before FAIS Trainers can conduct national training workshops.

Nominations are expected by the latest 10 July 2015.

Medupi power station delayed because the ancestors are upset

The reason the Medupi power station is suffering delays is because graves were disturbed during construction, upsetting the ancestors, the CRL Rights Commission said on Tuesday.

“How come this Medupi never comes together?” asked commission chairperson Thoko Mkhwanazi in Johannesburg at the release of a report on the re-use of graves by local governments. “It’s the bones underneath and in the vicinity. Some of the graves were destroyed there,” she said of the power station near Lephalale, Limpopo.

“The belief systems of some people will tell you that this Medupi dream of yours will never happen. It will be another 10 years.”

Construction of the power station has been beset by delays and strikes by contractors. She said the commission would send a report to Eskom on how to deal with the “bones that were strewn around” in a way that was culturally and religiously sustainable.

The report by the CRL Commission, a Chapter 9 institution that protects cultural and religious practices and linguistic communities, was compiled following complaints that several municipalities around the country were “recycling” graves.

Mkhwanazi said the ANC-run eThekwini municipality, the main culprit in grave recycling, was disrespecting cultural values. “For this to happen 21 years into democracy, for the ANC not to value the dead people, it tells you we are in a crisis. It tells us our values are not valued by those in power,” she continued.

The commission had received “a ton” of complaints from residents in several municipalities around the country, mainly from eThekwini. People were upset to find strangers buried in their relatives’ graves, and tombstones being removed and replaced with those of unrelated people. She said it was hard to reverse the effects, in terms of spirituality and cultural beliefs, of having a “Smith buried on top of a Naidoo on top of a Mkhwanazi”. “If we allow the eThekwini municipality to continue, other municipalities are likely to gravitate towards doing this. The new struggle is to have access to our forefathers,” she said.

According to African beliefs, the ancestor is believed to be living with God and playing a prominent, intercessory role in the life of a particular family, she explained. “This is your Jesus, it takes you to God,” she said.

“Recycling” a grave was akin to bombing a mosque. When people spoke to their ancestors, “I call them from the grave, not from some black plastic bag where they have been recycled,” she said.
“A grave is a place of communicating with those who have gone before,” said the commission’s deputy chairperson, Luka Mosoma.

Mkhwanazi said the practice was affecting the poor the worst, as they could not afford headstones and municipalities were re-using these graves. “The bigger the tombstone, the less likely you are to be recycled. This makes the poor people poorer, because if you don’t have the ancestors backing you, you are more likely to be poor.”

She said the eThekwini municipality’s procedure was to advertise its intention in the classified section of newspapers, but questioned if people saw these adverts. Local government’s position on the matter was that suitable land for cemeteries was fast becoming depleted, she said. “They are making it a land struggle. What local government is saying is very dangerous.”

The first prize, she said, was “one body one grave”. A weak second option was for municipalities to discuss recycling graves with affected relatives and communities before doing it. Mkhwanazi said the commission had held talks with local government, Parliament, the SA Local Government Association (Salga), and others.

“We are going to be much more aggressive. We’ve tried being nice. We are going to let the Constitution speak.” She called for national legislation on the matter. If the practice continued, the commission would ask its lawyers to approach the courts for them to determine “what now?” We hope this thing can be solved over a cup of tea. We are willing to give it one more try within a couple of weeks,” she added.

Salga’s Mvuyisi April said municipalities were “seriously running out of space”, but that there was no room for municipalities to violate rights. Salga was looking at striking a balance between managing space and respecting people’s rights, he said.