Do I need to register as a Financial Service Provider to operate...

Do I need to register as a Financial Service Provider to operate a burial society in South Africa?

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At the moment, the industry is unregulated, but a new regulatory framework is being developed to regulate the micro insurance industry.

A financial and accounting background would be most useful; however, at present it is not necessary to be a registered financial planner. However, because the industry is due to be regulated in the near future, it would be an advantage to be registered as a Financial Service Provider. This is done through the Financial Services Board.

Burial societies

Burial societies in South Africa have massive potential for wealth creation within South Africa’s poor and vulnerable communities if it is managed legally and efficiently. Because the industry is currently unregulated, customers are subjected to poor service and unfair pricing.

To prevent this INSETA is pushing for burial societies to register as co-operatives in an endeavour for burial societies to become more professional. INSETA has committed to provide capacity building workshops. These will be held nationally. Telephone the national call centre on 0860 1130013 for dates and venues for these workshops.

An estimated R5 billion rand is spent on funerals annually in South Africa. Speaking at the first Insurance Sector Education and Training Authority Indaba (INSETA) which was held in March this year, CEO Sandra Dunn said:

“Research has shown that more than 20% of the South African adult population are members of a burial society – so the importance of this sector must not be underestimated.”

“Burial societies also represent a significant spend with members prioritising 15% of their income towards this financial product. The interaction and synergy between traditional burial society cover and more formal financial products creates significant opportunities and challenges, which must be explored.”

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