Hanna Barry
2 minute read
24 Sep 2015
5:00 am

Billions in insurance benefits unclaimed

Hanna Barry

Life insurance companies have, over the past two years, managed to find 431 364 policyholders and beneficiaries due payouts from life policies and investments, according to the Association for Savings and Investment South Africa (Asisa).

Picture: Thinkstock

Asisa this week released statistics on the tracing activities of its long-term insurance members – which collectively manage more than R2 trillion in assets – to the end of June 2015.

Clear guidelines

This follows the implementation in June 2013 of the Asisa Standard on Unclaimed Assets, which provides clear guidelines aimed at improving the industry’s efforts to locate policyholders and beneficiaries who have unclaimed assets due to them.

“Just over one third of ‘lost’ policyholders and beneficiaries have already been traced and paid their benefits,” said Peter Dempsey, deputy CEO of Asisa. About 757 791 policyholders and beneficiaries must still be traced, said Dempsey.

The Standard requires that members of Asisa intensify their tracing efforts, which should begin within six months of assets becoming payable, in order to minimise unclaimed assets. Member companies reported the use of at least four different tracing initiatives per case, according to Dempsey, including the use of tracing agencies, private investigators, the Department of Home Affairs and credit bureaus. In some cases, Facebook and LinkedIn were used.

“For some people traced the financial windfall came at a time of great need,” Dempsey noted. One life insurer traced an 81-year-old policyholder who required a back operation, but did not have medical aid cover.

“Another client, whose wife died two years earlier, did not know that there was a life cover benefit payable to him. He was left to pay medical bills and raise the couple’s teenage daughter and desperately needed the money,” said Dempsey.

In terms of the Standard, life insurers that are members of Asisa commit to holding and growing unclaimed policy benefits until the rightful owner is found, no matter how long that takes. This money must be invested in line with the expectation created by the original risk or investment policy.

Unclaimed assets are exempt from the Prescription Act, which provides for a three-year period within which a right must be enforced. As of January 2016, the Standard will apply to Collective Investment Scheme (CIS) assets too.