The Complainant held a funeral insurance policy with the Respondent and paid monthly premiums of R288.80. Despite requesting cancellation, deductions continued. The issue arose when the underwriter cancelled the entire scheme in April 2023 due to what they claimed was a high claims ratio.

As the administrator, the Respondent disputed the accuracy of this ratio and attempted to negotiate with the underwriter to keep the scheme active, believing the cancellation was unfair and premature. Despite the April cancellation notice, the underwriter continued accepting premiums and honoring claims until August 2023, creating confusion and leading the Respondent to believe the cancellation was under reconsideration. The Respondent delayed informing clients and even attempted to onboard the scheme with a new underwriter, which ultimately failed.

Under the FAIS Act and Treating Customers Fairly (TCF) principles, the Office evaluated whether the continued premium deductions after cancellation were justified. The rule is that funeral policies are risk products without surrender value, and premiums paid before cancellation cannot be refunded. However, the Office determined that premiums deducted after the cancellation date must be refunded, which is fair and reasonable.

Based on this, the Respondent was asked to settle the complaint with the Complainant, and an amount of R2,885.00 was offered as a settlement.