Life assurance body criticised

JOHANNESBURG – South Africa’s Finance Ministry has condemned an attack by life assurance groups on the country’s Pension Fund Adjudicator (PFA) for its criticism of their fee structures and disclosure policies.

An official statement late on Sunday slammed the Life Offices Association (LOA), which represents top assurers like Old Mutual and Sanlam, for its comments last week and urged the industry to come up with reform proposals. “The Ministry strongly condemns the manner in which the LOA has chosen to undermine the integrity of the PFA through its confrontational statements,” the statement from Finance Minister Trevor Manuel said.”It is imperative that all stakeholders in the financial sector respect the integrity of the institution, and make use of the institutional processes available to them when seeking to challenge PFA rulings,” he added.LOA executive director Gerhard Joubert last week said PFA adjudicator Vuyani Ngalwana had alleged that life companies were behaving illegally and urged the country’s independent regulator, the Financial Services Board, to intervene.Ngalwana had displayed a “fundamental misunderstanding of how the long-term insurance industry operates”, he said.Rulings by Ngalwana against high surrender fees and other costs of retirement annuities have sent shock waves through the sector and prompted calls for urgent changes to fee structures.The government wants to shake up the lucrative retirement industry with new regulations to protect consumers and increase transparency, and Manuel said last week he hoped the rules would be ready by the middle of next year.”Not only does the Ministry call upon individual members of the insurance sector to distance themselves from the LOA comments, but also calls upon the industry to come forward with clear proposals on reforms that address both existing insurance policies and those issued in the future,” the statement said.-Nampa-Reuters”The Ministry strongly condemns the manner in which the LOA has chosen to undermine the integrity of the PFA through its confrontational statements,” the statement from Finance Minister Trevor Manuel said.”It is imperative that all stakeholders in the financial sector respect the integrity of the institution, and make use of the institutional processes available to them when seeking to challenge PFA rulings,” he added.LOA executive director Gerhard Joubert last week said PFA adjudicator Vuyani Ngalwana had alleged that life companies were behaving illegally and urged the country’s independent regulator, the Financial Services Board, to intervene.Ngalwana had displayed a “fundamental misunderstanding of how the long-term insurance industry operates”, he said.Rulings by Ngalwana against high surrender fees and other costs of retirement annuities have sent shock waves through the sector and prompted calls for urgent changes to fee structures.The government wants to shake up the lucrative retirement industry with new regulations to protect consumers and increase transparency, and Manuel said last week he hoped the rules would be ready by the middle of next year.”Not only does the Ministry call upon individual members of the insurance sector to distance themselves from the LOA comments, but also calls upon the industry to come forward with clear proposals on reforms that address both existing insurance policies and those issued in the future,” the statement said.-Nampa-Reuters