In May 2025, the High Court found that a bundled credit life insurance product contravened the National Credit Act of 2005 by providing cover to policyholders who could not benefit from the cover offered. The credit life product included disability and retrenchment cover which the credit provider sold largely to pensioners, and to disabled persons
In a UK decision it was argued that the position in which the credit insurer ended up was inherently suspicious because it was ‘circular’ in that, if the insurer incurred liability to one person, it could recover from the sole shareholder of the other party under a counter-indemnity. The court said:
“However, that is the
There have been a number of cases internationally where financial institutions have been obliged to refund policyholders for imposing force-placed insurance deals at the time of contracting for financial services.
Under the National Credit Act in South Africa, credit insurance must not be unreasonable nor at an unreasonable price and this is a good test