In our ongoing review of all existing processes, the Sanlam Corporate: Group Risk (SGR) teams reviewed the following processes:
- Proof of insurability: Medical Underwriting requirements
Medical evidence of insurability is required by an insurer to prove that a member is in good health, and based on the results of the medicals, can grant him/her the full potential group cover he/she qualifies for.
To assist members with better understanding of the requirements, the following information is made available to all parties (included as links within communication and a FAQ brochure), and also highlighting the following:
- A travelling nurse can assist with all blood tests and short medical reports (SMR) if requested, in the comfort of a member’s office. Upon receiving a completed Travelling Nurses-Service Request Form, which asks for all the relevant information required, the nurse will contact the member and confirm the appointment and arrange for the necessary. Our underwriting approach to the COVID-19 pandemic when making an appointment, is based on strict medical guidelines from both the National Institute for Communicable Diseases (NICD) and the Financial Sector Conduct Authority (FSCA).
- Members are however not obliged to go for medicals. Should a member choose not to attend to any medicals, he/she can inform SGR by completing a waiver form confirming the decision, and is/her record will be updated to reflect the decision.
2. Non-compliance and the provision of monthly member data
During May 2019 SGR communicated with policyholders (i.e. employers and/or funds) regarding the latest legislative changes, as well as informing them of the need for insurers to collect very specific member data as required by the Policyholder Protection Rules (PPR’s).
To assist insurers in fulfilling their regulatory requirement (as required by Rule 13 of the PPR’s), policyholders are tasked (by the PPR’s) to add to the data fields collected on a monthly basis, i.e. in addition to the current member data that the policyholder submits, insurers are now required to also gather:
- Members’ contact details (phone/mobile and/or email); and
- If Spouse’s Life insurance is applicable, members’ spouse details (names and ID numbers).
- If Extended Funeral insurance is applicable, members’ extended family details (names and ID numbers and relationship)
Should any of the information fields be absent, SGR Administration will inform the policyholder of the non-compliance and engage with them to arrange for the provision of the information as soon as possible.
3. FAIS subcategory A accreditation for Funeral insurance policies
In Government Notice no. 707 of 26 June 2020, the Determination of Fit and Proper Requirements for Financial Services Providers (FSPs), 2017, was amended by the Financial Services Conduct Authority (FSCA). Of particular importance is the amendment to the definition of the long-term insurance subcategory A-financial product.
Previously, only Assistance policies were included in the subcategory A-financial product, but will now also include a life insurance policy that is underwritten under the Funeral class of life insurance business, as set out in Schedule 2 of the Insurance Act, 2017 (“the Act).
When Sanlam Life Insurance Limited’s license was converted on 29 June 2020 (in terms of the Act), SGR’s risk products were re-classified according to the classes of life insurance business specified in the Act. More specifically, SGR’s Funeral insurance products were re-classified under the Funeral class of life insurance business, as set out in Schedule 2 of the Act. (Previously, Funeral insurance policies were classified under the Long-term Insurance subcategory B1-product.)
As a direct result of this re-classification and the afore-mentioned amendment to the Fit and Proper requirements, Financial Services Providers (FSPs) and their representatives will in future require accreditation for long-term insurance subcategory A in relation to SGR’s Funeral insurance policies, to ensure continued compliance with the Fit and Proper requirements under the Financial Advisory and Intermediary Act, 2002 (FAIS Act).
In terms of the FAIS Act, SGR is required to verify that the FSP/Representative is approved for the subcategory A-product, because this accreditation is necessary for the FSP/Representative to qualify and remain authorised, approved or appointed in respect of SGR’s Funeral insurance.
SGR has conducted a compliance review of all the FSPs and their Representatives that are currently not approved for the long-term insurance subcategory A-product, according to the FSCA website (in respect of the applicable Funeral insurance policies) and will send correspondence to all affected parties in the coming weeks.