MICRO INSURERS EXEMPT FROM LONG-TERM POLICYHOLDER PROTECTION WAITING PERIOD RULE

MICRO INSURERS EXEMPT FROM LONG-TERM POLICYHOLDER PROTECTION WAITING PERIOD RULE

• 05 March 2024
• Financial Sector
• SA Legal Academy

The Financial Sector Conduct Authority has issued a notice exempting micro insurers from Rule 2A.4.1 of the long-term insurance policyholder protection rules.

According to an accompanying communication, the rule prohibits the inclusion of a waiting period of longer than three months in any micro-insurance policy for a death, disability or health event resulting from natural causes. This rule:

• is ‘at odds’ with the six-month waiting period offered by ‘traditional’ funeral policies
• ‘leaves micro insurers at a competitive disadvantage’, and
• ‘may have unintended consequences, which could be to the detriment of vulnerable low-income customers’.

The exemption is subject to adherence to requirements spelled out in the communication itself. It was released in draft form in October 2023 for public comment, as SA Legal Academy reported at the time.

• exemption notice
• communication

Published by SA Legal Academy Policy Watch

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