Manuel tells life industry to shape up

Financial services consumers had in the past been victims of inequities, disguised by ‘opaque disclosure of costs’ that went unnoticed in an environment where high inflation made even miserable returns look good, Manuel said, according to a Finance24 report. He added: ‘It is a challenge for the industry to build a new business model, one that will act as a proper foundation to serve the consumer satisfactorily into the future.’ Manuel said the cost of contractual savings products had been brought under the microscope by the Pension Fund Adjudicator and parliamentary hearings. Full Finance24 report

In the meantime, Pension Fund Adjudicator Vuyani Ngalwana has asked Manuel to probe retirement endowments, where he says consumers are being fleeced without legal protection. This, says a Business Day report, comes after Ngalwana issued 22 new rulings, one of which involved a case where an Old Mutual customer contributed R109 535 to an endowment policy, yet by last year the value had plummeted by more than half to R54 639. Although Ngalwana has taken a tough stance against excessive fees that life assurers charge on retirement annuities, he admitted he had no jurisdiction to hear this case, as it dealt with a basic endowment investment policy administered by Old Mutual. Business Report notes that in his latest ruling on RAs, Ngalwana has instructed Sanlam, Capital Alliance and the Professional Provident Society to repay with interest excessive fees unlawfully deducted from policyholders. Full Business Day report Full report in Business Report