12 hours ago
FAIS ombud upholds complaint against Luvuyo Burial and Consulting
The office of the ombud for financial services providers has issued a determination in favour of Pumelele Mantingani after financial services provider Luvuyo Burial and Consulting failed to honour a funeral policy claim.
Luvuyo Burial's failure to honour the claim has also resulted in its licence as a financial services provider being suspended by the Financial Sector Conduct Authority (FSCA).
Mantingani, who took out a funeral policy with the company in September 2020, lodged a complaint with the ombud's office on October 28 last year after Luvuyo Burial and Consulting failed to honour a valid claim after the death of her uncle, Mbuyeni Katshi, on July 17 2024. Mantingani submitted her claim on July 27 2024.
Luvuyo Burial and Consulting, based in Khayelitsha, Cape Town, acknowledged the claim and committed to payment, but only partially honoured the obligation, paying R5,000 of the R10,000 due.
Despite further assurances, the balance remains unpaid. Numerous attempts were made by the ombud to resolve the matter amicably. Though Luvuto Burial undertook on more than one occasion to settle the outstanding balance, it failed to do so.
During the investigation, it also came to light that Luvuyo Burial was operating without an underwriter, raising serious concerns regarding its compliance with regulatory requirements.
In assessing the evidence, the office found that the policy was valid and that the deceased was listed as an insured life.
However, Luvuyo failed to act in accordance with the policyholder protection rules, which require that: 'An insurer must, within two business days after all required documents in respect of a claim under a microinsurance policy or a funeral policy have been received, assess and make a decision whether the claim submitted is valid, and authorise payment of the claim, repudiate the claim or dispute the claim and notify the claimant of the dispute.'
The ombud said the company's failure to process the claim appropriately reflected noncompliance with treating customers fairly outcome 6, which states that 'customers do not face unreasonable post-sale barriers when they want to change a product, switch providers, submit a claim or make a complaint'.
As a result, the ombud upheld the complaint and ordered that Luvuyo Burial and Consulting pay the complainant the outstanding balance of R5,000 with interest at a rate of 11.25% per annum from the date of the determination until the date of final payment.
'Given the respondent's failure to comply with regulatory requirements, a copy of this determination was referred to the FSCA for its attention and possible enforcement action.
'As a result, the respondent's licence as a financial services provider was suspended by the FSCA on April 14,' the ombud said.
