FSCA statement on Mtshali family and Old Mutual matter

The Financial Sector Conduct Authority (FSCA) is aware of a recent unfortunate event involving Old Mutual Assurance Company SA (Pty) Ltd and the Mtshali family in Kwa-Zulu Natal.

It is our understanding at this stage that the family resorted to the desperate action of bringing the body of their deceased loved one to an Old Mutual branch in order to have their benefits paid out to them. We are interrogating the facts in this matter, and once we have concluded our assessment, we will take appropriate action where necessary.

As the conduct authority for the financial sector, we exist to ensure that financial customers are treated fairly by financial institutions. While we do not resolve individual complaints, we do hold accountable any licensed entity that does not treat its customers fairly.

We have also noted a call on social media for the cancellation of Old Mutual policies. Although we understand the frustration felt by many, we urge customers not to cancel their policies, as there are risks involved with such an action, such as:

• A customer who cancels their life policy may find it very difficult if not impossible to find new cover if they had developed medical conditions along the course of their policy.
• A life policy taken out when you are younger is usually a lot cheaper than a policy taken out when you are older and a new policy taken out by an older person may not just have higher premiums but it may be difficult to get the same cover and limits they had before.
• Early termination of an investment policy could attract charges, and these could also be payable on entering an alternative investment.
• There maybe waiting periods attached to the new funeral cover a client receives.

If a customer does decide to replace their policy, it is essential to first obtain a detailed comparison of the features and costs of the old and new policies, preferably with the help of a qualified financial adviser. The FSCA’s role is to protects financial customers and to make sure that they are treated fairly by financial intuitions. For more information contact the FSCA on 0800 110 443 or visit www.fsca.co.za.