SA’s life assurers make reparations of N$1,5 bn

JOHANNESBURG – Almost all of South Africa’s life assurers with endowment and retirement annuity fund policies had contributed to payouts of about R1,5 billion as compensation to clients who were penalised for stopping premium payments, the Life Offices Association (LOA) said on Friday.

This is half of the total they had set aside. Lerato Mametse, the deputy executive of LOA, the trade association for the long-term insurance industry, said a little more than 90 per cent of the life assurers had made these payments.”This country’s top five life companies such as Old Mutual, Sanlam, Momentum, Liberty Life and Metropolitan had made these payments.”Mametse would not reveal how much each had paid but said the bulk of the R1.5 billion came from these assurers.”Two of our members are currently completing manual enhancements on a very small number of policies.The enhancements could not be completed electronically with the rest of the batch,” she said.”These policies currently represent less than 1 per cent of the total policies enhanced.”Mametse did not name the two companies.The LOA said the remaining funds would ensure that members whose policies had lapsed or who had taken early retirement between January 2001 and December 2006 would receive value enhancements.They would also ensure that retirement annuity fund members who decided to retire early would receive at least 70 per cent of the fund value.Endowments that were surrendered would receive at least 60 percent of the fund value.The LOA said more than half a million retirement annuity funds and endowment policies had benefited from the “value enhancements” implemented by the life assurers over the past six months.This was in line with the statement of intent, signed by the LOA and finance minister Trevor Manuel in December 2005.The aim of this statement was to provide better value for retirement annuity fund members and endowment policyholders who could no longer afford their premiums.Lizè Lambrechts, chairman of the LOA, said the implementation of the statement of intent represented an important step for the life insurance industry towards regaining consumer confidence.The deadline for the qualifying policies was end May this year.Apparently by the end of May, life companies had delivered on their promise to enhance retirement annuity funds and endowment policies that were still on their books and that had had their value reduced by 35 per cent because premiums had been stopped or reduced between January 2001 and end-November 2006.The LOA represents 36 insurers controlling more than 95 per cent of the South African market.Business ReportLerato Mametse, the deputy executive of LOA, the trade association for the long-term insurance industry, said a little more than 90 per cent of the life assurers had made these payments.”This country’s top five life companies such as Old Mutual, Sanlam, Momentum, Liberty Life and Metropolitan had made these payments.”Mametse would not reveal how much each had paid but said the bulk of the R1.5 billion came from these assurers.”Two of our members are currently completing manual enhancements on a very small number of policies.The enhancements could not be completed electronically with the rest of the batch,” she said.”These policies currently represent less than 1 per cent of the total policies enhanced.”Mametse did not name the two companies.The LOA said the remaining funds would ensure that members whose policies had lapsed or who had taken early retirement between January 2001 and December 2006 would receive value enhancements.They would also ensure that retirement annuity fund members who decided to retire early would receive at least 70 per cent of the fund value.Endowments that were surrendered would receive at least 60 percent of the fund value.The LOA said more than half a million retirement annuity funds and endowment policies had benefited from the “value enhancements” implemented by the life assurers over the past six months.This was in line with the statement of intent, signed by the LOA and finance minister Trevor Manuel in December 2005.The aim of this statement was to provide better value for retirement annuity fund members and endowment policyholders who could no longer afford their premiums.Lizè Lambrechts, chairman of the LOA, said the implementation of the statement of intent represented an important step for the life insurance industry towards regaining consumer confidence.The deadline for the qualifying policies was end May this year.Apparently by the end of May, life companies had delivered on their promise to enhance retirement annuity funds and endowment policies that were still on their books and that had had their value reduced by 35 per cent because premiums had been stopped or reduced between January 2001 and end-November 2006.The LOA represents 36 insurers controlling more than 95 per cent of the South African market.Business Report