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More than 37 000 policyholders, beneficiaries and investors traced and united with assets of R5.6 billion

07 September 2017 Rosemary Lightbody, ASISA

More than 37 000 policyholders, beneficiaries and investors were traced and united with assets worth R5.6 billion in the six-month period from 1 July 2016 to 31 December 2016. As at 31 December 2016 there were 130 740 cases of unclaimed assets in long-term insurance policies and collective investment scheme portfolios worth R4.4 billion.

The Association for Savings and Investment South Africa (ASISA) this week released the first update on the tracing activities of its members since the ASISA Standard on Unclaimed Assets was revised to include asset managers, Collective Investment Scheme (CIS) management companies and linked investment service providers (Lisps). The Standard does not apply to retirement funds.

Rosemary Lightbody, senior policy adviser at the Association for Savings and Investment South Africa (ASISA), says this is the first set of data received from ASISA member companies since the Standard was extended beyond life insurers, effective from the beginning of 2016. “We are still in the process of refining reporting templates with the aim of being able to provide a more detailed breakdown of figures by early next year.”

She says while the unclaimed assets of R4.4 billion represent a sizeable amount of money, it is only 4% of the R107 billion in total benefits paid by life insurers to individual policyholders and beneficiaries in the six months to the end of December 2016.

Lightbody says ASISA members who subscribe to the Standard are committed to honouring unclaimed policy and investment benefit claims no matter how long it takes for the policyholder, beneficiary or investor to come forward and claim the assets.

“This means that a valid long-term insurance policy contract will be honoured by our members, no matter when it was issued. And if there is money sitting in a long forgotten collective investment scheme portfolio, our members will pay the accumulated value to the investor or a legal beneficiary.”

The Standard also sets requirements for members on the treatment of unclaimed assets and encourages the use of enhanced tracing procedures so as to keep unclaimed assets at a minimum level.

Lightbody explains that the Standard requires companies to start the process of tracing policyholders, beneficiaries or investors within six months of the assets becoming payable.

She says 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. Members also make use of social media, especially Facebook and LinkedIn, with the aim of locating policyholders, beneficiaries or investors who have unclaimed assets due to them.

Lightbody calls on consumers to ensure that the relevant financial institutions have their updated contact details on record. “This will ensure that assets are paid to the rightful owners when they become due.”

Equally important, says Lightbody, is understanding what happens to assets when a policyholder or investor dies:

• A beneficiary nomination on a life policy generally supersedes the provision of a will and the life insurer will pay the death benefit directly to the nominated beneficiaries. If no beneficiaries were nominated, the life insurance proceeds form part of the deceased estate. If there is a valid will, the benefits will be distributed in accordance with the will.
• In the case of collective investment scheme portfolios, if the investor dies, the assets form part of the deceased estate. If the investor had a valid will in place the proceeds will be distributed in accordance with the will.
• In terms of the Pension Funds Act, retirement fund trustees must seek out and consider the circumstances of potential financial dependents when allocating death benefits. This applies to pension funds, provident funds, preservation funds and retirement annuities even if the fund member nominated beneficiaries. Therefore, anyone who is financially dependent on a retirement fund member has a legal right to claim a portion of the retirement fund death benefit.

Tracing lost policyholders

ASISA has a system in place designed to assist members of the public who need help with finding out whether a deceased person had an insurance policy or tracing policies where the policyholder is not sure of the insurer’s details.

The person making the enquiry will be required to complete a form, which is then circulated to all member offices. On receipt, member offices check the details against their records and if there is an existing policy, notify the person making the enquiry within seven days provided the company is satisfied that the person making the enquiry has a valid interest in the information about the policy. Details can be found under the “Lost Policy” link in the Contact section of www.asisa.org.za.

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