FSCA cracks down on funeral firms for unlicensed policy sales
The FSCA has secured undertaking from four funeral homes to get their house in order after it was revealed that they sold funeral insurance to clients without the relevant licences.
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The Financial Sector Conduct Authority (FSCA) has clamped down on four funeral firms that issue funeral policies without licensed underwriters in place and that have, in total, collected more than R67 million in premiums without the required insurance licences.
All four funeral companies have, meanwhile, signed undertakings to rectify their licensing status and to comply with the law in this regard in the future.
The FSCA recently dealt with each case on its own and conducted investigations in each matter after receiving information that the companies were issuing funeral policies without having an insurer, which is a contravention of the Insurance Act.
In each case, the owners of the funeral houses gave their cooperation and fully undertook to rectify matters.
In the first matter, TFBS Funeral Parlour in Orkney, North West, came under the spotlight after it had advised 275,870 clients and collected R66,263,210 in premiums between May 2022 and September 2024. The parlour settled 2,325 claims, amounting to R34,875.
The FSCA pointed out that the Financial Advisory and Intermediary Services Act provides that a person may not act or offer to act as a financial services provider unless the person has been issued with a relevant licence.
The Insurance Act, in turn, provides that no person in South Africa may conduct insurance business in the country without a licence issued under this Act.
Thus, the FSCA said, the collection of premiums and the processing of claims without these licences are not permissible.
The funeral parlour, meanwhile, undertook to, within 30 days, provide proof of the insurance business underwriting.
They also undertook to ensure that at all times, their clients’ business is placed with a licenced underwriter.
Funeral Assist 24 CC, based in Johannesburg, also gave a similar undertaking and fully cooperated with the FSCA. It had advised about 2000 clients between October 2022 and June this year.
The closed corporation collected R666,708 in premiums during this time and paid out 144 claims worth R432,000.
Cape Town-based Eyodidi Funeral Undertaker operated from December 2023 to June 2025 without the required licence. The investigation revealed that they collected R810,000 in premiums from 150 clients, of which they settled 98 claims. The contraventions were also admitted in this case, and the undertaking company also undertook to rectify the situation.
Ermelo in Mpumalanga-based funeral parlours, Soul City No 1 and Amashiba Amahle, which share a single owner, also undertook to abide by the FSCA rules and get their house in order.
Across both entities, it has 220 clients and collected R13,000 in premiums, while 50 claims were paid.
Cape Times