In a determination under the Financial Advisory and Intermediary Services Act (FAIS Act), issued on 6 December 2024, the FAIS Ombud ruled in favour of Mr Pulungoana Moeti against Lebohang Funeral Home (Pty) Ltd (‘Lebohang’) (FSP No. 50729).
Mr Moeti had a funeral policy with Lebohang, incepted on 10 December 2018. The monthly premiums payable on the policy were R200.00, with a benefit amount of R20,000.00.
When Mr Moeti’s sister, Ms MMT Tsosane, the life insured on the policy, passed away on 13 November 2022, he submitted a claim. The claim was not paid.
Based on the evidence submitted, all the premiums on the policy were paid, the claim fell outside the waiting period and there was no basis for the rejection of the claim.
Upon investigation, it appeared that the claim was rejected due to a dispute between Lebohang and the underwriter, Gavanni Group Scheme. Lebohang submitted that it was underwritten by Gavanni and blamed Gavanni for the claim’s non-payment. However, there was no clear evidence that Gavanni was the underwriter of the Complainant’s policy when the insured passed away in November 2022, and Lebohang appears to have unlawfully issued policies and accepted premiums without being underwritten.
Lebohang made offers to pay the claim but never made any payments. Lebohang was found to be solely responsible and liable for paying the claim submitted by the Complainant. Lebohang was ordered to pay R20 000 plus interest to the Complainant. Lebohang’s license was suspended in July 2024. However, it was still registered as a Financial Services Provider when the complaint was lodged with this Office. The subsequent suspension of the license on 31 July 2024 does not affect the Office’s jurisdiction to adjudicate on the matter.
Lebohang did not file any application with the Financial Services Tribunal for a reconsideration of the decision.
The determination will be made an order of the applicable court and the Complainant will be entitled to enforce the order through the normal court processes.
Access full determination here.
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