The Association for Savings and Investment South Africa (ASISA) was formed in 2008 with the mandate of playing a significant role in promoting a culture of savings and investment in South Africa by working as a united body towards making financial services more relevant to the consumer.[1]
ASISA represents the majority of the country’s asset managers, collective investment scheme management companies, linked investment service providers, multi-managers and life insurancecompanies.[2]
ASISA issued a Standard on Unclaimed Assets that came into effect on 1 June 2013 and set out the tracing process that should be followed by life companies. It also stipulated what should happen to assets when beneficiaries cannot be traced.
Since the implementation of the Standard on Unclaimed Assets, Life Insurers have reunited 431 364 policyholders and beneficiaries with their unclaimed benefits.[3]
More than three million South Africans are owed more than R45 billion in unpaid benefits from retirement funds they have left already.[4]
As of January 2016, the same Standard was extended to include Collective Investment Scheme assets. ASISA is engaging with the Financial Services Board on extending the principles contained in the Standard to cover unclaimed pension fund benefits.
The main elements of the standard on Unclaimed Assets:
- Member companies have to report to ASISA once a year on efforts to trace policyholders or beneficiaries, and cases that have not been settled within three years. These statistics will be made available to the Financial Services Board
- Prescription will not apply. Therefore, an unpaid benefit is a debt of a respective company to a policyholder, but does not have to be paid after a period three years[5]
- A life company may never take ownership of unclaimed assets. However, any money that remains unclaimed by the time the original policyholder is recorded as reaching the age of 100 may be invested in social responsibility initiatives that offer a return on capital
The Standard on Unclaimed Assets requires life insurers to start the process of tracing policyholders or beneficiaries within six months of the assets becoming payable. In instances where the rightful owner of the assets cannot be traced, company must repeat the tracing process within a three year period and again within 10 years if the assets remain unclaimed. According to Mr. Dempsey, ASISA expects majority of tracing efforts to reflect within the six month period.
Some examples of people who have been tracked and benefited from the ASISA campaign are:
- One life insurer traced an 81-year-old policyholder who had forgotten about his investment policy. The grateful policyholder told the insurer that the benefit could not have come at a better time since he required a back operation and did not have medical aid cover
- For an elderly couple the unexpected benefit payment meant that they could visit their children whom they had not seen in more than three years due to financial constraints
- Another client, whose wife died two years earlier, did not know that there was a life cover benefit payable to him. He was left to pay medical bills and raise the couple’s teenage daughter and desperately needed the money
According to Mr. Peter Dempsey, deputy CEO of ASISA, a total of approximately 757 791 policyholders and beneficiaries must still be traced. He explains, however, that the total number of policyholders to be traced will always be a moving target.
With Billions in unpaid benefits remaining and the dynamic nature of the data in the financial services sector, the tracing services will make is continuous and significant impact. IDATA is a specialist data quality software supplier and data driven marketing service bureau. IDATA’s tracing platform service ITrace has helped asset reunification and investment companies trace numerous beneficiaries.
[1] https://www.asisa.org.za/en/about
[2] https://www.asisa.org.za/en/
[3] https://www.asisa.org.za/en/media-release/74-media-releases-2015/303-significant-number-of-lost-policyholders-and-beneficiaries-traced
[4] http://unclaimedbenefits.co.za/unclaimed-benefits/
[5] https://www.sanlaminvestments.com/mediacentre/media-category/media-releases/The%20New%20ASISA%20Standard%20on%20Unclaimed%20Assets