Pretoria – Government has published the final credit life insurance regulations that will provide more protection for consumers by ensuring that the insurance cover taken is appropriate for the needs of consumers, said the National Credit Regulator.
The regulations were published in the Government Gazette on 9 February and outline the limit of the cost of credit life insurance to R4.50 per R1 000 of the deferred amount for credit facilities. These include unsecured loans, developmental credit agreements and other types of credit agreements.
In addition, the cost of credit insurance is limited to R2 per R1 000 of the deferred amount for mortgage agreements. The regulations will come into effect six months after date of publication.
“The regulations will provide more protection for consumers by ensuring that the insurance cover is appropriate for the needs of consumers. Consumers that are not employed cannot be sold retrenchment cover,” said Senior Legal Advisor at the NCR Nthupang Magolego.
The regulations prescribe the minimum benefits that must be offered to consumers and the limitations or exclusions that apply to the insurance cover.
“A consumer who dies or becomes permanently disabled will have his or her outstanding debt under a credit agreement settled by the credit life insurance policy. If the consumer loses his or her job, the policy will pay instalments due under a credit agreement for up to 12 months,” said Magolego.
A copy of the regulations can be downloaded from the NCR’s website on www.ncr.org.za.
The National Credit Regulator, which is an agency of the Department of Trade and Industry, was established as the regulator under the National Credit Act No. 34 of 2005 (The Act) and is responsible for the regulation of the South African credit industry.