South Africa calls for tighter insurance controls after payout killings — Daily Maverick
In South Africa, the National Financial Ombud Scheme (NFO) has called for mandatory informed consent from the person whose life is insured under a funeral policy. The NFO believes this could reduce opportunities for fraud and abuse related to insurance payouts.
As Daily Maverick reports, the NFO said reports of such crimes pointed to the devastating social consequences of insurance fraud. Denise Gabriels, the lead ombud for the life insurance division, said requiring the insured person's consent would increase transparency, strengthen consumer protection, and help insurers verify the legitimacy of policies when they are issued.
Uniform rules for insurers
According to Gabriels, some insurance companies already have such safeguards, but they are applied unevenly across the market. The NFO advocates improved standards for all insurers.
At the same time, the scheme stressed that criminal charges alone do not mean a beneficiary is guilty. If an investigation is unjustifiably delayed or police confirm that the recipient of the payout is not a suspect, the NFO may require the insurer to assess the claim on the basis of the available evidence and the terms of the contract. The ombud believes that families and innocent beneficiaries should not remain in uncertainty indefinitely.
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Cases of killings for payouts
Senior prosecutor Louis Sinclair, who works on cases involving killings for insurance payouts, supported the idea of mandatory consent but called it insufficient. According to him, criminal groups may force a person to give such consent through threats or blackmail.
Sinclair considers policies providing double or triple payouts in the event of accidental death to be a bigger problem. According to him, in several cases, policies were updated to add such payouts shortly before the victim's death. The prosecutor proposed abolishing these multipliers or changing the terms so that a policy does not provide a payout in the event of an unnatural death.
At the High Court in Gqeberha, four accused have appeared in court in a case linked to nine murders and 29 allegedly fraudulent funeral policies. According to the prosecution, they falsely claimed family ties to the deceased and may have received more than 1.7 million rand. The case is being investigated by the Murder for Money special police unit, established in the Nelson Mandela Bay area.
