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Long Term Insurance Act, 1998 (Act No. 52 of 1998)

Regulations

Regulations under the Long-term Insurance Act, 1998

Part 5 : Requirements and Limitations regarding the Values and Benefits of Policies (Section 54)

Part 5A : Policies other than Policies to which Part 5B applies

5.3 Fund member policies

 

(1) Where a causal event occurred in respect of a fund member policy on or after 1 January 2001, but before the effective date, and the insurer on account of that causal event deducted causal event charges which in total exceed the maximum prescribed in subregulation (2), the insurer must:
(a) if the policy has not come to an end before the effective date, within 6 months after the effective date credit the policy with the amount by which the total causal event charges deducted exceed the prescribed maximum ("the excess amount") plus interest on the excess amount calculated in accordance with regulation 5.5; or
(b) if the policy has come to an end before the effective date, and if the amount by which the total causal event charges deducted exceed the prescribed maximum ("the excess amount") is R150 or more, upon the written request of the member, or in the case of a deceased member upon the written request of the dependants or nominees of the member, which request in every case must be received by the insurer within three years after the effective date, within 6 months after having received the written request pay the excess amount plus interest on the excess amount calculated in accordance with regulation 56, less any tax that must be deducted, to the member or to the dependants or nominees of a deceased member.

 

(2) The maximum deductible charges for purposes of subregulation (1) are:
(a) where the causal event is one contemplated in paragraph (a), (c), (f) or (g) of the definition "causal event", 35% of the investment value immediately before the causal event;
(b) where the causal event is one contemplated in paragraph (b) of the definition "causal event", a percentage of the investment value immediately before the causal event equal to 35% multiplied by the amount by which the basic premium has been reduced divided by the basic premium before it was reduced;
(c) where the causal event is one contemplated in paragraph (d) or (e) of the definition "causal event", 35% of the amount by which the investment value immediately before the causal event has been reduced.

 

(3) Where a causal event occurs in respect of a fund member policy on or after the effective date but before 1 January 2018, the insurer may not on account of that causal event deduct causal event charges which in total exceed the maximum prescribed in subregulation (4).

[Regulation 5.3(3) substituted by regulation 6(g) of Notice No. 1437 of 2017]

 

(4) The maximum deductible charges for purposes of subregulation (3) are:
(a) where the causal event is one contemplated in paragraph (a), (c), (f) or (g) of the definition "causal event", 30% of the investment value immediately before the causal event;
(b) where the causal event is one contemplated in paragraph (b) of the definition "causal event", a percentage of the investment value immediately before the causal event equal to 30% multiplied by the amount by which the basic premium has been reduced divided by the basic premium before it was reduced;
(c) where the causal event is one contemplated in paragraph (d) or (e) of the definition "causal event", 30% of the amount by which the investment value immediately before the causal event has been reduced.

 

(5) Where a causal event occurs in respect of a fund member policy during a period referred to in column 1 of Table A below, the insurer may not on account of that causal event deduct causal event charges which in total exceed the maximum percentage set out in the corresponding line in column 2 of the Table A below

 

Timing of causal event

Maximum if causal event is one contemplated in the following paragraph of the definition "causal event"


for purposes of paragraph (a), (c), (f) or (g), the maximum percentage below of the investment value immediately before the causal event:

for purposes of paragraph (b), the maximum percentage of the investment value immediately before the causal event equal to percentage below multiplied by the amount by which the basic premium has been reduced divided by the basic premium before it was reduced:

for purpose of paragraph (d) or (e), the maximum percentage below of the amount by which the investment value immediately before the causal event has been reduced:

On or after 1 January 2018

but before 1 January 2019

20%

20%

20%

On or after 1 January 2019

but before 1 January 2020

18%

18%

18%

On or after 1 January 2020

but before 1 January 2021

16%

16%

16%

On or after 1 January 2021

but before 1 January 2022

14%

14%

14%

On or after 1 January 2022

but before 1 January 2023

12%

12%

12%

On or after 1 January 2023

but before 1 January 2024

11%

11%

11%

On or after 1 January 2024

but before 1 January 2025

10%

10%

10%

On or after 1 January 2025

but before 1 January 2026

9%

9%

9%

On or after 1 January 2026

but before 1 January 2027

8%

8%

8%

On or after 1 January 2027

but before 1 January 2028

7%

7%

7%

On or after 1 January 2028

but before 1 January 2029

6%

6%

6%

On or after 1 January 2029

5%

5%

5%

 

[Regulation 5.3(5) inserted by regulation 6(h) of Notice No. 1437 of 2017]