By Ashleigh Brown, journalist, Justmoney
Molo Funeral Services has been fined R200,000 after the Financial Services Board (FSB) found that it was selling financial policies as an unregistered financial insurance business from 1 September 2011 to December 2013.
The business was selling assistance policies to consumers, in which it provided policy benefits in exchange for premiums paid by their clients. Molo Funeral Services also settled claims lodged by their clients.
Eugene du Toit, the manager of Insurance Regulatory Framework at the FSB said that Molo Funeral Serives had, as of December 2013, 800 clients.
The fine
The company has accepted its wrongful conduct, and the FSB reported that they did not waste the Enforcements Committee’s time by denying the allegations. Furthermore, the funeral service has also accepted to pay the costs of the case.
“The Registrar agreed that Molo Funeral Services pay a penalty of R200 000 and costs related to the case in the amount of R71 230,” said the FSB.
If Molo Funeral Services does not accept the full terms of the policy, and is then taken to court, the funeral service will be liable to pay all the legal proceedings costs.
Justmoney contacted Molo Funeral Service but they declined to comment.
Du toit said that there are no longer any active clients with Molo funeral Services, as the book of business has been taken over by a registered insurer.
"Subsequent to the Registrar identifying the contravention, Molo Funeral Services engaged a registered insurer to underwrite its book of business.
"The Registrar then received confirmation that the registered insurer is underwriting Molo’s book of business. Therefore, there should be no active policies between Molo Funeral Services and its clients, but only active policies between the registered insurer and Molo’s clients," said du Toit.
Related cases
Earlier this year, Justmoney reported on other funeral homes which sold insurance policies without a proper license.
The FSB has so far warned the public against doing business with the following entities: Faizel Dollie Funeral Home, Clarinise Funeral Services, Abomelezi Funeral Services cc, Speelman Family Funeral Home, City Funeral Fund, Holy Cross, Maphutha Dihuswana Funeral Group, Tshwaragano Funerals and Omega Funeral Services.
“When taking out a funeral policy, consumers must ask the company if it is registered with the FSB and confirm the information they are provided with the FSB before taking out a policy,” said the FSB.
In 2013 the office finalised 4,496 full cases with 77% of the cases finalised within six months. The office recovered R103, 8 million in lump sums for complainants over the past year with 33% of cases resolved wholly or partially in favour of complainants. Compensation of R323, 741 was granted to consumers for poor service.
For more on funeral policy schemes visit: nine funeral schemes under investigation; FSB fines Thuso Burial Services; Rouge funeral palours
If you want to get a funeral insurance policy through a registered provider you can do so through Justmoney, visit: http://tinyurl.com/lh9fau4