MICRO INSURERS TO BE EXEMPT FROM BENEFITS PAY-OUT WAITING PERIOD RULE?

MICRO INSURERS TO BE EXEMPT FROM BENEFITS PAY-OUT WAITING PERIOD RULE?

• 05 October 2023
• Financial Sector
• SA Legal Academy

The Financial Sector Conduct Authority (FSCA) has called for input by 14 November 2023 on proposals for exempting micro insurers from the long-term insurance policyholder protection benefit pay out waiting period rule.

According to the accompanying communication, a micro insurer may not impose a waiting period of longer than three months in respect of benefit pay outs for ‘death, disability or (a) health event resulting from natural causes’. ‘This is at odds with the six-month waiting period … permitted for so-called traditional insurers … offer(ing) funeral policies.’

The intention of the exemption envisaged is to align the regulatory framework with the overarching policy objectives of:

• promoting market development and competition, and
• enhancing financial inclusion ‘by enabling micro insurers to provide affordable and accessible policies to vulnerable and low-income consumers’, and 
• levelling the playing field between traditional insurers and micro insurers.

Please click the links below for more information:

• draft exemption
• FSCA communication
• comments template

Published by SA Legal Academy Policy Watch

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