Cape Town - The Financial Services Board (FSB) warned the public against illegal funeral policies amid a probe of thirteen entities.
Funerals are important occasions in South Africa and are often lavish and costly affairs. In some instances, families incur large debts to fund a decent send-off.
To avoid this, people are increasingly turning to funeral plans, but this could turn out to be a money making scheme, cautioned the FSB in a statement on Wednesday.
It urged the public to be wary when purchasing such policies.
"The FSB investigates and takes action against entities who sell funeral policies to the public whilst such policies are not underwritten by a registered long-term insurance company."
It said this conduct amounts to running unregistered insurance business thus breaching the provisions of the Long-term Insurance Act 52 of 1998.
The entities under investigation are:
Read Fin24's top stories trending on Twitter: Fin24’s top stories
The FSB said these entities were requested to provide proof that their funeral policies are underwritten by a registered long-term insurance company, as required by law, and were afforded 10 days to respond.
However, they have either failed to respond to the request or failed to confirm that their funeral policies are underwritten by a registered long-term insurance company.
"Entities, including their owners, that breach the provisions of the long-term Insurance Act 52 of 1998 may be subject to a fine or imprisonment upon conviction."
*Any persons having any queries regarding the above-named entities may contact Mr Milton Sebaka at 012 422 2875