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Funerals always bring grief, which is often made onerous by the hefty price tag that comes with laying a beloved to rest.
The funeral wake and the burial ceremony are all oiled by money.
To loosen the burden associated with the inevitable eventuality of death, many people often resort to funeral assurance companies, where they periodically pay premiums.
But, squeezed by low disposable incomes, many have been hunting for very low premiums, which sometimes lead them into the hands of fly-by-night funeral assurance companies. Many of the companies that are duping unsuspecting members of the public describe themselves as funeral service providers but are also deceptively providing funeral assurance.
Nomagugu Sibanda rues the day she engaged a named Harare-based company.
“They are ripping us off,” she told The Sunday Mail Society.
“Imagine, I have been paying US$10 for the past eight months and they promised to provide a bus and tent, among other things. The time has come and they are now failing to do even a single one of the things they promised.
“Instead, they are asking for more money from me. Authorities need to check into this. We are not even being allowed to see management for recourse,” she fumed.
Mercy Chikanda, another victim, claimed: “They make false claims in their advertisements just to lure clients and many people fall for it . . . Imagine how many people they dupe daily?”
Subsequent investigations revealed that the company was operating illegally.
The company’s managing director confirmed that the company was simply a funeral service provider and not a funeral assurance company.
“We are in the process of changing the company from a funeral service provider to a funeral assurance company, and we are yet to get a licence as we are still working on the paperwork.
“To those who had already paid money to us, we are still offering the promised services. However, we have since stopped collecting premiums from people until we get a licence from the Insurance and Pensions Commission (IPEC),” he said.
This is not an isolated case.
Taurai Mhandu found out that he had the short end of the stick after his brother passed away. He had the ignominy of burying his brother after a long time as another named company that he had been paying premiums to — reportedly began reneging on its promises.
“I was tormented. It took longer for us to bury my brother as the funeral company kept on demanding a top-up. They were alleging that I had defaulted on payments. This was despite the fact that I had proof of my fully paid-up policy,” Mhandu said.
He only managed to arm-twist the company into doing that which it had promised him before after he threatened to report them to the police.“It took long for them to attend to us. As if it was not enough, they had promised two buses but they only gave us one. We only learned after the funeral that the company is not registered,” he said.
A funeral service provider, unlike a funeral assurance company, is not supposed to collect premiums from clients, according to IPEC
It only gets paid for services rendered at a particular time.
However, it must also be a registered entity. Of late, the industry regulator has been inundated by reports of unregistered funeral assurance companies around the country.
Section 7 and 9 of the Insurance Act requires all funeral assurance companies to be registered with IPEC.
“We also conducted our own investigations and established that indeed there are some unregistered entities that are selling funeral assurance policies to the public.
“We reported these to the police for prosecution because it is illegal to operate an insurance business without being registered,” said IPEC Commissioner Dr Grace Muradzikwa.
However, efforts to get a comment from the Zimbabwe Republic Police (ZRP) spokesperson Assistant Commissioner Paul Nyathi over the issue were in vain by the time of going to print. IPEC public relations manager Lloyd Gumbo, however, confirmed that the two companies in question were not registered.
“There is a data capturing system for registered entities and the two companies are not there. If they are not appearing on our portal it means they are not registered with us and they are bogus.
“We have in the past received complaints from people who bought funeral policies from some of these bogus funeral assurance companies but cannot locate them anymore,” he said. Last year, at least eight entities were operating without required licensing in Bulawayo alone. The commission urged members of the public to exercise caution.
“Registered entities are found on our website or they (public) can ask for the registration certificate before doing business with an entity,” adds Dr Muradzikwa.
Industry experts opine most funeral service companies are failing to secure reassurance arrangements due to declining profits, increasing costs and poor compliance levels.
Zimbabwe Association of Funeral Assurers (ZAFA) general manager Taka Svosve believes there is need to tighten regulations.
“It is true. We have some fly-by-night funeral insurers in the industry who collect premiums and fail to meet the services they promise. Such things happen because they take advantage of loopholes in regulation or they ride on the ignorance of the public,” said Svosve.
“From a Government side, IPEC is the sole regulator of insurers and no one is supposed to collect premiums without a licence from the commission . . .We are carrying out campaign messages letting people know the correct information and how to authentic companies from bogus operators so that they are not duped of their money,” he said.
Funeral assurers currently registered on IPEC’s portal include Doves Funeral Assurance, Cell Funeral Assurance, First Funeral Assurance, Foundation Mutual Society-Assurance, Moonlight Funeral Assurance & Services, Passion Funeral Assurance, Ruvimbo Funeral Assurance, and Vineyard Funeral Assurance.
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