The Minister of Trade and Industry, together with the Minister of Finance, published the final Credit Life Insurance Regulations in terms of the National Credit Act.
The Minister of Trade and Industry, with the Minister of Finance, has issued and published the final Credit Life Insurance Regulations. One of the aspects set out in the Regulations is the maximum cost a credit provider may charge a consumer. This maximum cost includes the cost of any commission, fees or expenses in relation to that credit life policy. This may therefore impact the earning potential of credit providers.
The Regulations clearly prescribe that all exclusions and limitations in a credit life insurance policy must be explained to the consumer on the date the agreement is entered into. The Regulations also stipulate that the exclusions and limitations must be communicated to the consumer at regular intervals after the date that the agreement is finalised.
In terms of the Regulations, consumers may exercise their right to substitute a credit life insurance policy to that of the consumer’s choice at any time after the credit agreement was entered into. The credit provider must accept such substitution provided that the consumer’s new and preferred policy provides the benefits set out in section 3 of the Regulations. The Regulations will take effect from August 2017, six months from the date of publication, and will only affect credit agreements entered into on or after the commencement date.