Funeral insurance exploitation addressed

New regulations aim to protect vulnerable policyholders

- NYANISO QWESHA

AS THE year ends, South African regulators are examining markets that impact millions daily. Funeral insurance, although familiar, has seen serious conduct failures that demand attention and clear reform.

In many black South African communities, a dignified funeral is more than a ritual; it affirms belonging, honours ancestry, and offers dignity in vulnerability. Funeral insurance is embedded as a crucial financial tool that helps families provide respectful burials without incurring debt or facing social stigma.

For decades, burial societies, stokvels, and funeral parlours fulfilled this role responsibly. As funeral cover became commercially attractive, however, the market expanded rapidly. Banks, retailers, mobile operators, call centres, and informal intermediaries rushed in. Funeral insurance became easy to sell and even easier to buy. Oversight struggled to keep pace. What followed was not just market saturation, but a profound failure of conduct.

South Africans were forced into a painful reckoning. High-profile criminal cases shocked the nation, exposing a chilling truth. The Rosemary Ndlovu murders were not merely isolated crimes. They revealed a system that allowed unlimited policies, weak identity checks, and poor distribution controls. More recently, police have uncovered alleged syndicates in the Eastern Cape and Limpopo linked to policy stacking on vulnerable individuals.

These are not aberrations. They are symptoms of a structurally compromised distribution model.