Long-Term Insurance Amendment Bill (PMB - Mr N Kwankwa (UDM)

Call for comments opened 12 January 2024 Share this page:

Submissions are now closed (since 23 February 2024)

Finance Standing Committee

In accordance with section 73(2) of the Constitution of the Republic of South Africa, 1996, Mr Nqabayomzi Kwankwa, MP, intends to introduce the Long-Term Insurance Amendment Bill, 2024, in Parliament. An explanatory summary of the Bill is hereby published in accordance with Rule 276(1)(c) of the Rules of the National Assembly (9th Edition).

The Long-Term Insurance Act, 1998 (Act No. 52 of 1998) (“the principal Act”), does not provide for a due diligence exercise to be conducted by a long-term insurer offering a funeral policy product, to determine whether the policyholder or prospective policyholder already holds a funeral policy for the same life event. This prejudices policyholders as they are only made aware of the implications of holding multiple funeral policies issued by the same long-term insurer, at the claims stage. This results in some of the funeral policies not paying out because of the benefits implications of holding multiple funeral policies. The long-term insurers’ failure to make policyholders aware of the benefits implications, results in policyholders paying a lot of money on premiums for funeral policies that come to naught.

To avert this prejudice suffered by policyholders of, and beneficiaries under, a funeral policy, the Long-Term Insurance Amendment Bill, 2024 (“draft Bill”), intends to amend the principal Act, so as to—
• require the Authority to prescribe rules related to protecting a policyholder of multiple funeral policies for the beneficiaries, and to require a long-term insurer to offer advice within a certain period to existing policyholders related to the consequences of holding multiple funeral policies for the same beneficiaries;
• provide that non-disclosure of a funeral policy for the beneficiary does not affect the validity of an affected funeral policy and that a policyholder of a funeral policy is entitled to cancel any of the multiple funeral policies held for the same life event after being advised of the benefits implications thereof; and
• provide for a sanction in the event of a failure of a long-term insurer to comply with certain rules and disclosure obligations.

Find here: Notice of Introduction Long-Term Insurance Amendment Bill, 2024 [PMB]

Comments can be emailed to can be emailed to the Speaker of the National Assembly at [email protected] and Mr Nqabayomzi Kwankwa at [email protected] by no later than Friday, 23 February 2024.

Enquiries can be directed to Mr Nqabayomzi Kwankwa on tel (021) 403 3071 or [email protected]