Funeral parlour operates without relevant permit

THE Financial Services Board (FSB) is investigating a North West funeral parlour for running its business without an underwriter.

Sowetan was tipped off last week that Sizwile Funeral Solutions in Klipgat has been operating for years without acquiring the services of an underwriter – a move that renders its business illegal according to FSB policies.

An underwriter is a reputable financial institution that accepts liability and guarantees that funeral parlour’s clients are paid for their claims. The parlour makes monthly payments to its underwriter.

Earlier this month FSB issued a warning about 12 undertakers that were selling policies without underwriters.

“This conduct amounts to running unregistered insurance business, thus breaching the provisions of the Long-term Insurance Act 52 of 1998,” FSB’s Tembisa Marele said.

Sizwile owner Bennet Sibanda told Sowetan he had been using two underwriters, Executive Underwriting Managers (EUM) and Riskfin, since he took over the funeral business in 2014.

However, EUM said their contract with Sizwile was cancelled in 2014 after Sibanda failed to keep up with the monthly premium payments.

“His contract with us was cancelled in March 2015 for nonpayment. Sizwile only made one premium payment in 2014,” Vicky Lombard from EUM said.

Robert Sheldon from Riskfin said although his company had prepared a contract with Sizwile early this year, it was nullified when Sibanda failed to pay. “As far as we know he is operating illegally because he does not have an underwriter.. We have been trying to make him comply but he never came on board,” Sheldon said. When Sowetan asked Sibanda about the above assertions he changed his story and said he had asked someone to help him get an underwriter and that the process was at an advanced stage.

The parlour has about 250 clients in Letlhabile, Tembisa and Kriel in Mpumalanga. They pay between R150 and R250 per month.

Marele said Sibanda’s business would be investigated.

“We will follow our standard procedure to establish the facts. If the parlour is found to be conducting an unregistered insurance business and that clients have been prejudiced, regulatory action will be taken against it,” Marele said.

“ As far as we know he is operating illegally