Turning the screws on insurance sharks

2014-07-06 10:58

South Africa’s approximately 70 active consumer credit insurers (CCIs) just had a giant target painted on their foreheads.

These are the companies that add insurance fees to the loans consumers take out when buying anything from a house, a car and a ­TV set to a cellphone on credit.

Hypothetically, CCI contracts protect the buyer by covering their debt in case of death and unemployment?–?or if the product gets damaged or ­stolen.

In practice, people often get saddled with overpriced insurance they might never claim on nor even know about.

A joint technical report by National Treasury and the Financial Services Board was released on Thursday.

It paves the way for the regulation of these often shadowy insurance products that push up the debt burden of millions of low-income consumers.

The headline finding is that premiums for CCIs amounted to R16?billion in 2012.

 » Get City Press newspaper today for the full story.

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