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Life insurers unite thousands with unclaimed assets in first half of 2014

16 October 2014 Peter Dempsey, ASISA
Peter Dempsey, deputy CEO of ASISA.

Peter Dempsey, deputy CEO of ASISA.

Life companies managed to trace 182 366 policyholders and beneficiaries in the first six months of this year and unite them with unclaimed assets due to them as a result of benefit or maturity payments.

The Association for Savings and Investment South Africa (ASISA) this week released statistics on the tracing activities of its long-term insurance members aimed at locating policyholders and beneficiaries who have unclaimed assets due to them. This is the first time that such information is released and follows the implementation of the new ASISA Standard on Unclaimed Assets in June last year.

Peter Dempsey, deputy CEO of ASISA, says of the 182 366 people traced, 76 151 were traced within six months of benefits becoming payable to them, 37 772 were traced within three years and 68 443 were traced within 10 years. In total, some 349 536 policyholders and beneficiaries must still be traced.

He says South African life insurers who are ASISA members have committed to holding and growing unclaimed policy benefits until the rightful owner is found, no matter how long it takes.

The ASISA Standard on Unclaimed Assets, which has been in place for just over a year, exempts unclaimed assets from the Prescription Act, which provides for a three-year period within which a debt must be collected.

Dempsey says this commitment by life insurers was developed as part of the industry’s focus on treating customers fairly.

The new Standard requires that ASISA members intensify the level of tracing policyholders or beneficiaries in order to minimise the pool of assets that remains unclaimed.

Dempsey says the reports received from member companies show at least four different tracing initiatives per case, including the use of tracing agencies, private investigators, the Department of Home Affairs and credit bureaus.

“We have also seen a number of insurers apply innovative tracing methods using social media. The most successful searches have been via Facebook.”

Dempsey says in terms of the new Standard, life insurers are obliged to start the process of tracing policyholders or beneficiaries within six months of the assets becoming payable. He says this approach is showing the desired results, with more people being traced within the first six months of a benefit becoming payable than not.

Policyholders/beneficiaries traced

Policyholders/beneficiaries not yet located

Within 6 months of benefit becoming payable

76 151

39 665

Within 3 years of benefit becoming payable

37 772

162 393

Within 10 years of benefit becoming payable

68 443

147 478

TOTAL

182 366

349 536

Dempsey says while people always appreciate receiving financial assistance from a policy, especially if it is unexpected, for some people traced in the first six months of this year the windfall came at a time of great need.

One life company traced a beneficiary who did not know that her late husband had bought death cover before he died. According to her, her husband was “financially broke” when he died and left her to take care of their son. She was very grateful and emotional when she was paid the death benefit.

Another insurer traced a client who had forgotten that he had a savings policy with the insurer. He had relocated, but did not provide the insurance company with updated contact details. After he had been traced and paid his money, the client disclosed that he was receiving cancer treatment and that he was now in a position to pay his medical bills.

One life company also managed to trace a 32-year-old woman who was only 10 when her father died. She was the beneficiary of his death benefit.

Dempsey says while the current Standard only applies to unclaimed long-term insurance benefits, ASISA is in the process of expanding it to include collective investment scheme assets by 2016 and then pension fund benefits.

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