Unclaimed benefits tracing efforts paying off

The efforts by members of the Association for Savings & Investment SA (Asisa) to trace the rightful owners of billions of rands of unclaimed benefits in life assurance policies, and those of the Financial Services Board (FSB) to pressurise retirement funds to do the same are starting to pay off.
This week, Asisa said that between implementing its “Standard on Unclaimed Benefits” for the life assurance industry in June 2013 and June this year, life companies had traced and paid 431 364 policyholders and beneficiaries.
Peter Dempsey, the deputy chief executive of Asisa, says that 757 791 policyholders and beneficiaries must still be traced.
The amounts of money paid out and still unclaimed are not disclosed, because Asisa members are not required to report on the value of the unclaimed benefits. Dempsey says the aim is to encourage the tracing of policyholders and beneficiaries rather than measuring the value of the assets involved.
“The good news is that just over one-third of ‘lost’ policyholders and beneficiaries have already been traced and paid their benefits,” Dempsey says.
He says the Asisa Standard currently applies only to unclaimed long-term assurance benefits. This will change in January next year when it becomes effective for collective investment schemes as well.
He says Asisa is engaging with the FSB on extending the principles contained in the standard to cover unclaimed pension fund benefits.
Rosemary Hunter, the deputy FSB executive in charge of retirement funds, announced that the FSB is to step up its campaign to reduce the massive R20 billion owed to 3.07 million fund members or their dependants in unclaimed retirement fund benefits as well as blocking “charlatans” who are seeking to exploit the situation.
Beneficiaries include “lost” former retirement fund members as well as widows and orphans entitled to the benefits of members who died before retirement.
Measures include:
* Increasing pressure on retirement funds and their administrators to trace beneficiaries;
* The establishment by the FSB over the next two years of a searchable central database, which will include the names of all people who have not claimed their benefits; and
* Issuing FSB guidance notes to the retirement industry on unclaimed benefits.
Dempsey says the total number of policyholders to be traced will always be a moving target, because there will always be policyholders who do not update their contact details and beneficiary details.
He says the reports received from member companies show at least four different tracing initiatives for each missing beneficiary case, including the use of tracing agencies, private investigators, the Department of Home Affairs and credit bureaus.
Assurers are also using social media, especially Facebook and LinkedIn, and approaching professional membership bodies.
Some examples of people who have been tracked and benefited from the Asisa campaign are:
* An 81-year-old policyholder, who had forgotten about his investment policy and did not have medical scheme cover, was able to afford a back operation.
* An elderly couple could visit their children whom they had not seen in more than three years due to financial constraints.
* A widower, 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.
* The daughter of a deceased policyholder was able to open her own business with the proceeds of a death benefit due to her.
If you do not want benefits owed to you or your beneficiaries to become unclaimed benefit statistics, you must:
* Ensure that you check and regularly update your contact and identification details with your life company, collective investment scheme company and retirement fund.
* Ensure that you name beneficiaries of your life assurance and retirement fund benefits and provide their contact details and identification numbers.
* Make and maintain a list of all your investments, life assurance policies (including funeral policies) and retirement funds, with the name of the company and details of the product, such as policy numbers and retirement fund membership numbers. Tell a trusted relative where the list is kept, or give it to the person you have nominated to be the executor of your estate.
Many people suspect that they may be the beneficiary of a life assurance policy but do not know how to go about making a claim. The Association for Savings and Investment SA (Asisa) says you should do the following:
* If you know the name of the life assurance company that issued the policy, you can simply call the company. The assurer will ask you to provide information that shows that you have a real and legitimate interest in the policy proceeds. The company is required to provide you with feedback within seven working days.
* If you believe that you or a deceased relative may have had an assurance policy (life cover or an investment policy), or you come across an old policy contract in your files but are not sure of the assurer’s details, Asisa may be able to help. On the Asisa website (www.asisa.org.za) click on “Contact” and then scroll down to “Lost Policies”. Download the Lost Policy form, complete it, and either email or fax it to Asisa. This form will be circulated among Asisa’s member companies. The life assurers will check the details against their records and if there is an existing policy, you will hear from the company within seven days.
The company will, however, need to ensure that you have a valid interest in the policy.