Two life insurance companies lashed out at the Limpopo Mirror and GroundUp, following last week's article about deductions from SASSA payouts to pensioners in Vhembe. The insurers strongly denied that any of the people who complained were unaware of the funeral policies, or that any mis-selling had taken place.
In last week's article, the Limpopo Mirror reported that several local pensioners were complaining about deductions from their SASSA payments. The pensioners claimed not to know why the deductions were made.
Interviews were conducted with the pensioners, and the names and details of six of them were provided to SASSA in an attempt to establish why deductions were being made. SASSA replied that in four cases the deductions were for Emerald Life funeral policies, while in two cases the policies were taken out with 1Life.
The Social Assistance Act of 2004 and its regulations set out what type of deductions may be made from social grants. Under Regulation 29, only one type of deduction is legal: a single funeral policy. This may only be issued by an insurer registered under the Long-Term Insurance Act and may not exceed 10% of the total value of the grant. The beneficiary must also have given explicit consent for the premiums to be deducted.
The amounts deducted from the pensioners varied from R160 to R300. When interviewed, the pensioners claimed not to have copies of the policies they had supposedly signed up for. Many said they already had funeral policies with other insurers and had no need for additional insurance.
After questions were sent to SASSA, the agency issued a press release raising the alarm over a surge in unlawful deductions from social grants, often disguised as funeral or insurance policies for which beneficiaries had never signed up. SASSA chief executive Themba Matlou said the agency had been "inundated with enquiries" from distressed beneficiaries who discovered their grants reduced by deductions for products they had not consented to.
Emerald Life responds
Emerald Life initially told GroundUp that none of the people enquired about had at any stage contacted it directly to lodge a complaint. The insurer undertook to send a senior team to the region "to ensure that, should there be any further concerns raised relating to funeral contracts held with Emerald Life, these are identified, addressed, and resolved in a fair and transparent manner."
"The fair treatment of customers remains central to our values. We are fully committed to Treating Customers Fairly principles and to ensuring that all clients are treated with respect, dignity, and transparency," said Emerald Life's complaints manager, Jill Abrahams.
Following publication of the article, Emerald Life sent a letter to GroundUp via its lawyers, demanding that the article be removed or substantially changed. The letter highlighted what the company believed were factual errors. GroundUp made changes to the original article, and the Limpopo Mirror followed suit.
In Emerald Life's response, the company said that in its initial attempt to contact the affected individuals, it was able to reach only one policyholder, who indicated she was aware of her Emerald Life policy and wished to continue with it.
The company later contacted one of the pensioners quoted in the article. The pensioner initially told Emerald Life he was not aware of the policy. After being shown a photograph of himself holding the policy document and his ID, he allegedly conceded that the policy had been in place for three years. A request for its cancellation was honoured.
The two other pensioners who complained were visited by Emerald Life representatives. While the company maintained that its investigations showed nothing improper, it agreed to cancel the policies and assisted the pensioners.
"The above notwithstanding, our client [Emerald Life] has cancelled the policies of all three affected individuals who requested cancellation and has refunded their premiums paid to date as a goodwill payment," the letter from the lawyers states.
Emerald Life emphasised that it was committed to "Treating Customers Fairly (TCF) principles and to ensuring that all clients are treated with respect, dignity, and transparency."
Response from 1Life
1Life, through its public relations company Orange Ink, said it took these matters very seriously. "We understand the frustration and distress that pensioners may feel when there is confusion regarding deductions from their accounts, and our priority is always to protect our clients and uphold their trust."
According to 1Life, it follows a rigorous new-business process that includes multiple safeguards to ensure client understanding and acceptance of policies. "This process involves paper-based documentation, one-time pin (OTP) confirmation, welcome calls, and follow-up SMS communication – all designed to confirm policy acceptance and provide clients with the opportunity to cancel if they so wish."
1Life insisted there was no evidence of mis-selling. "However, we remain committed to assisting any client who wishes to cancel their policy, and we encourage affected individuals to contact us directly, so that we can resolve their concerns swiftly," the company said.
After the article appeared, 1Life contacted the Limpopo Mirror to insist that the wording of a caption be changed. The caption had incorrectly stated that one of the pensioners, Rezara Makhalimela, was signed up for a 1Life policy for which R190 per month was deducted. In fact, Mr Makhalimela was signed up for an Emerald Life policy.
Portia Mvubu, senior digital and communications manager at Orange Ink, said they had investigated this claim and found that no deductions had been made for policies in Mr Makhalimela's name. She added that 1Life had, however, sold a policy to him.
"A legitimate policy application was submitted with Mr Makhalimela's proof of acceptance," she said. He was sent an OTP and received a welcoming call during which he confirmed the cover. "The policy was cancelled post-application as Mr Makhalimela already had an existing SASSA deduction with another insurer," she said.