ZIMELE STANDARDS: 7 FEBRUARY 2008

The following existing standards are covered:

Member only Funeral Insurance
Member and Family Funeral Insurance
Parent Funeral Cover
Credit Life
Life cover
Physical Impairment cover

The standards are not necessarily prescriptive in the sense that every item must be followed precisely, but are provided as principles.

General provisions applicable to all standards

Use of standardised policy terms: Sample policy documents will be prepared for each CAT standard product – these should be used for guidance in the usage of standardised terms.
Minimum standards for documentation:
- Product description, sales process and fulfilment/servicing documentation must be provided in an easily understandable way, where applicable.
- A summary of policy terms must be provided to the client in writing. This must be available on request in any of the eleven official languages.
Standards apply for Group Schemes: In general if the sale of a product is made as part of any group scheme, the product must comply with the standards in the same way as if it was an individual policy. Where there are exceptions for Group Schemes business these will be stated in the relevant product standard.
If more than one product is “bundled” together and sold as a single product with multiple benefits, each element of the bundled product must comply with these standards or the bundled product must be CAT standardised. E.g. if funeral benefits for extended family are added to a CAT standard funeral policy, the extended family benefits or the policy as a whole must be CAT standardised. If not, the policy will not be counted for scoring purposes. The reason is to prevent the bypassing of CAT by applying excessive premiums to ancillary benefits.
Benefits in addition to those stipulated in the CAT standards may be included on a compulsory basis in CAT standardised products, only to the extent that this does not result in the maximum premium for that product being breached.
No HIV/AIDS exclusions or reduction in benefit amount may be applied at claims stage on lives accepted onto the policy.
Unless otherwise stated, premium increases are permissible up to the maximum price stipulated in the standard. If at any stage the premium rates exceed the maximum applicable rate for the particular product and policyholder’s age at entry the product will cease to be CAT compliant.
The maximum rates may be amended at the discretion of the Charter Council on request by the LOA.
Underwriting:
- Underwriting is permitted and underwriting questions may be asked
- No medical examinations or pathology tests (HIV or other pathology test) may be requested when underwriting.
- Existing information on record may be used in underwriting
- Permissible results of underwriting are a) acceptance of the proposal on standard terms or b) decline. No loadings, exclusions or alternate terms may be offered. However, the applicant may be offered another policy which does not have to be CAT compliant, but which will not count for points-scoring purposes. In the event that a CAT compliant product is offered as an alternative and accepted, such a sale will count as a sale of a CAT compliant product.

Applicable to all standards EXCEPT Credit Life:

Allowance for interrupted contributions:
- Throughout the term of the policy, if a premium is not paid when due there will be one month of grace i.e. cover will continue and the policyholder has one month to pay the premium. If the premium is not paid within that month, the cover will cease. However after the policy has been in force for one year, the grace period will be extended by one month for each 12 month period the policy has been in force, with no reduction in cover, with a maximum of 6 months of non-payment. However if there is a claim after one or more month’s premiums are unpaid, the claim value may be reduced by the unpaid premium/s. E.g. if a person pays continuously for 5 years and then is unable to maintain premium payments, he/she will enjoy “free” cover for up to 6 months although a claim during this period may be reduced by unpaid premiums.
- In order to prevent abuse in the case of Group Schemes with a bulk premium, any premiums owed may be offset against any claims made to derive a net payment due to the scheme.
- The extended grace period will include all automatic cover/premium increases since inception based on the original inception date. Voluntary increases do not need to be included i.e. insurers may calculate the grace period for the increased portion of the premium from the date of the voluntary increase.
- Same-terms reinstatement: During the term of the policy at least one "Same-terms Reinstatement" must be available to the client for 3 months from the date of last premium payment, without requirement for catch-up on the unpaid premiums. No cover needs to be provided in this period. On reinstatement the terms must be the same as the original policy - same cover, same price, no additional temporary exclusions (waiting period). Limited underwriting may be done before reinstatement, such as a declaration of health. On reinstatement, the allowance for interrupted premiums (grace period) may be reset to one month.

Funeral Insurance Standards

Elements common to “Member only”, “Member and family” and “Parent cover” standards

No temporary exclusions (waiting period) for accidental death: Accidental death cover must commence on receipt of the first premium.
Standardised exclusion wording: Standardised exclusion wording must be used.
Limitations on allowable exclusions: Only the following exclusions will be allowed:
- Suicide excluded for 2 years
- Temporary natural causes exclusion
Beneficiary nomination provided for: Provision must be made for a beneficiary for proceeds to be nominated as the person to receive payment in the event that the policy owner is not alive at time of claim. Payments may not be made directly to an undertaker as a condition of the contract.
Age rating only: No rate differentiation may be made for any policyholder except for age. In other words the same rate will apply to all policyholders of the same age at entry. Rates may differ between groups for group schemes and affinity based distribution but the only differentiation factor permitted within a group is age.
Maximum Premium rates are set on an “age at entry” basis, i.e. they do not allow for automatic increases triggered by the movement of a life insured into another age bracket.

Member and Family funeral insurance

Minimum and maximum benefits available:
- The minimum cover may not be less than R5 000 for the principal member, and the maximum cover may not be more than R20 000.
Limits on maximum entry age: Maximum entry age for principal member and spouse may be no lower than 65
Limits of minimum entry age: Minimum entry age for principal member may be no lower than 14 and no higher than 18.
Maximum duration of natural causes exclusion: A maximum 6 month exclusion for death by natural causes may be applied for all lives covered. The full sum assured must apply after this period.
Minimum Sum Assured for family:

Life assured	Multiple of principal member cover
Spouse	1
Children age 14-21	1
Children age 6-13	0.5
Children age 1-5	0.25
Children age 0-11 months	0.125
Stillbirths	0.125

Additional lives may be added, provided that the premium rate for each additional life does not exceed that applicable to Member Only (excluding the fixed charge), and all terms and conditions will be identical to those for Member Only (except that there is no minimum cover).
Maximum rates to policyholder: Maximum, age-banded, monthly prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.

Max monthly prices to policyholder:
- For Member and Family
  - Below age 55
    - R5 + R8 per mille
  - For age 55 and older
    - R5 + R13 per mille

For example, R5000 cover for a Member and Family below 55 will cost a maximum of R45 per month.

If cover is offered to policyholders over the age of 65, the following maxima apply
- For Member and Family
  - Above age 65 and below age 75
    - R5 + R19 per mille
  - For age 75 and older
    - R5 + R24 per mille

Member only funeral insurance

Minimum and maximum benefits available:
- The minimum cover may not be less than R5 000 for the principal member, and the maximum cover may not be more than R20 000.
Limits on maximum entry age: Maximum entry age may be no lower than 65
Limits of minimum entry age: Minimum entry age may be no lower than 14 and no higher than 18
Maximum duration of natural causes exclusion: A maximum 6 month exclusion for death by natural causes may be applied for all lives covered. The full sum assured must apply after this period.
Additional lives may be added, provided that the premium rate for each additional life does not exceed that applicable to Member Only (excluding the fixed charge), and all terms and conditions will be identical to those for Member Only (except that there is no minimum cover).
Maximum rates to policyholder: Maximum, age-banded, monthly prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.
Max monthly prices to policyholder:
- For Member only cover
  - Below age 55
    - R5 + R4 per mille
  - Age 55 to age 65
    - R5 + R6 per mille
- If cover is offered to policyholders over the age of 65, the natural causes exclusion may be extended to a maximum of 12 months and the following maxima apply
  - For Member only cover
  - Above age 65 and below age 75
    - R5 + R8 per mille
    - For ages 75 and over
    - R5 + R24 per mille

Parent funeral insurance

Minimum and maximum benefits available:
- The minimum cover may not be less than R1 000 for each parent, and the maximum cover may not be more than R20 000.
Limits on maximum entry age: Maximum entry age may be no lower than 75
Maximum duration of natural causes exclusion: A maximum 12 month exclusion for death by natural causes may be applied for all lives covered. The full sum assured must apply after this period.
Maximum rates to policyholder: Maximum, age-banded, monthly prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.

Max monthly prices to policyholder:
- For parents below age 75, per parent
  - R5 + R8 per mille
- For parents age 75 and over, if available, per parent
  - R5 + R24 per mille

Credit Life

Minimum cover and benefits available:
- Death benefit only or
- Death and permanent total physical impairment [see standard definition under the main product heading of Physical Impairment.
- If temporary physical impairment or retrenchment benefits are included as compulsory benefits, they must be provided without exceeding the maximum premium set out below. If they are voluntary options, the premium must be disclosed separately.
- Cover may not exceed the outstanding debt amount

This product may not be used to provide cover on a mortgage loan
No temporary exclusions (waiting period) for any cause of death: Death cover must commence on receipt of the first premium
Standardised exclusion wording: Standardised exclusion wording must be used.
Limitations on allowable exclusions: Only the following exclusions will be allowed:

- For Life and Physical impairment
- Pre-existing conditions: All conditions that were known to have existed up to a maximum of 12 months prior to the inception of the policy will be excluded for a maximum of 12 months after inception.
- suicide during the first 2 years
- For Physical impairment only
- self-inflicted actions
- war or armed conflict (whether war is declared or not), civil unrest and social revolt
- being affected by alcohol or drugs not prescribed by a registered medical practitioner
- refusing medical treatment by a registered medical practitioner
- radio activity or nuclear explosion
- involvement in criminal acts.
No rate differentiation may be made for any policyholder. In other words the same rate will apply to all policyholders. Rates may differ between groups for group schemes or affinity based distribution but no differentiation is permitted within a group.
Maximum rates to policyholder: Maximum, prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.

- Max monthly prices to policyholder:
  - Life Cover Only, R5 + R3,5 per R1 000 of initial cover
  - Life and Physical impairment Cover, R5 + R4,25 per R1 000 of initial cover

Life Cover

Minimum cover and benefits available:
- Death: Min cover may not be less than R30 000.
- Level Term or with a specified annual increase in cover.
If additional benefits are provided, they must be voluntary and associated premiums must be separately disclosed
Minimum policy term: The policy term must be at least 5 years.
Maximum age at entry may not be less than 60.
No temporary exclusions (waiting period) for accidental death: Accidental death cover must commence on receipt of the first premium.
Temporary exclusion for natural causes deaths: Cover for death by natural causes may be scaled but cover must reach 25% after 6 months, 50% after 12 months, 75% after 18 months, and 100% after 24 months.
Standardised exclusion wording: Standardised exclusion wording must be used.
Limitations on allowable exclusions: Only the following exclusions will be allowed:
- Pre-existing conditions: All conditions that existed up to a maximum of 36 months prior to the inception of the policy will be excluded for a maximum of 24 months after inception.
- suicide during the first 2 yrs
Beneficiary nomination provided for: Provision must be made for a beneficiary for proceeds to be nominated as the person to receive payment in the event that the policy owner is not alive at time of claim.
Age rating only: No rate differentiation for any policyholder except for age. In other words the same rate will apply to all policyholders of the same age at entry. Rates may differ between groups for group schemes and affinity based distribution, but the only differentiation factor permitted within a group is age.
Maximum monthly rates to policyholder: Maximum, age-banded, monthly prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.

Below age 55
- R5 + R2,7 per 1 000
From age 55 to below age 65
- R5 + R4,5 per 1 000
From age 65 to below age 75
- R5 + R6,3 per 1 000
For age 75 and above
- R5 + R12,6 per 1 000

Physical Impairment Cover

Minimum cover and benefits available:
- Minimum cover may not be less than R30 000.
- Benefits may not be spread over more than 24 months.
If additional benefits are provided, they must be voluntary and associated premiums must be separately disclosed
Minimum policy term: A policy must be at least 5 years.
Maximum age at entry may not be less than 55.
No temporary exclusions (waiting period) for accidental impairment causes: Cover for accidental causes must commence on receipt of the first premium.
Temporary exclusion for natural causes: Cover for natural causes may be scaled but cover must hit 100% after 24 months.
Standardised definitions: The following definition should be used;

Loss of use of at least one hand or one foot; loss of sight in both eyes; or any other condition that makes it impossible for the life insured to follow any occupation.
The claim event can be either sickness or accident during the term of the contract.

Claims will only be paid if physical impairment has continued for 6 months and is considered to be of a permanent nature. (Companies may pay out earlier if the loss is definitely permanent, e.g. physical loss of limb.)

The benefit can be paid as a lump sum or in monthly installments over a maximum of 1 year.

Limitations on allowable exclusions:
Only the following exclusions will be allowed

Pre-existing conditions – all conditions that were known to have existed up to a maximum of 36 months prior to the inception of the policy will be excluded for a maximum of 24 months after inception
self-inflicted actions
war or armed conflict (whether war is declared or not), civil unrest and social revolt
being affected by alcohol or drugs not prescribed by a medical practitioner
refusing medical treatment by a registered medical practitioner
radio activity or nuclear explosion
involvement in criminal acts
Standardised exclusion wording: Standardised exclusion wording must be used.
Limitations on allowable exclusions: Only the following exclusions will be allowed:
- Pre-existing conditions: All conditions that were known to have existed up to a maximum of 36 months prior to the inception of the policy will be excluded for a maximum of 24 months after inception.
- self-inflicted actions
- war or armed conflict (whether war is declared or not), civil unrest and social revolt
- being affected by alcohol or drugs not prescribed by a registered medical practitioner
- refusing medical treatment by a registered medical practitioner
- radio activity or nuclear explosion
- involvement in criminal acts
Benefits restricted due to over insurance: Insurers may reduce the amount of cover that is applied for if over insurance is found to be present.
Age rating only: No rate differentiation for any policyholder except for age at entry. In other words the same rate will apply to all policyholders of the same age at entry. Rates may differ between groups for group schemes and affinity based distribution but the only differentiation factor permitted within a group is age.
Maximum monthly rates to policyholder: Maximum, age-banded, monthly prices to policyholder are set. No additional administration fee or levy may be added to the maximum premiums detailed, which must be the maximum total cost to the policyholder.

Below age 55
- R5 + R1 per 1 000
From age 55 to below age 65
- R5 + R2 per 1 000

From age 65 to below age 75
- R5 + R3 per 1 000
For age 75 and above
- R5 + R6 per 1 000