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Sunday, January 1, 1989
Aiding assurers

The life assurance industry in South Africa is a highly complex and developed business. Negotiations play a definite role in mapping out the answers to current issues affecting the industry, particularly in relation to the policyholder. To regulate the industry arid to improve the industry’s image, a voluntary association was established as far back as 1935.
It was known as the Life Offices’ Association (LOA) and was open to any registered life assurance company in South Africa. Members entered into agreements that they would refrain from certain practices in the marketplace. The agreements multiplied over the years and, in time, became known as the LOA “rules”. These so-called rules are really interoffice agreements since the LOA does not make and enforce rules, rather it is the members who enter into the agreements and enforce them.
Today the LOA has 36 members on its list of life assurers and is doing much to improve the lot of the policyholder. The association is the life equivalent of the SA Insurance Association (SAIA), the short term insurers’ central body.
The association is generally recognised today as the spokesman for the industry both in the private and public sectors. Its members are responsible for all but a very small percentage of all life assurance business in South Africa, the independent homelands and South West Africa.
Says June Wessels, PRO for the LOA, “The true role of the LOA is to regulate the industry from within, in the first place, and to represent the industry in negotiations with government, in the second.”
The LOA is currently concentrating on addressing matters of unethical conduct in the assurance industry. For this reason a Representatives Agreement was drawn up debarring all agents and brokers found guilty of unscrupulous conduct.
This is a topical issue at the moment and was highlighted at the recent SA Insurance Brokers’ Association (SAIBA) conference. Several speakers stressed the importance of honest marketing and selling of life assurance products.
The LOA has a series of committees and sub-committees. Overall the activities are directed by the Management Committee. This constitutes 12 members who are either chief or deputy chief executives of the member companies.
The post of chairman of the LOA is currently held by Mike Levett, MD of Old Mutual, whose duties include being spokesman for the association and attending administrative and official functions.
The association, however, has other more immediate activities than that of being spokesman for the assurance industry as a whole. There are always many pressing issues within the industry which need to be discussed and solved. For this function a secretariat has been drawn up. Dick Geary-Cooke heads this secretariat as executive director on a permanent basis, striving to keep all member offices informed of any important developments.
Quite predictably, one of the issues high on their list is the question of AIDS. According to Mr Geary-Cooke, AIDS poses a serious problem to the assurance industry mainly because of speculation over its forthcoming mortality rates. He stresses that the LOA “would like to encourage education over the AIDS issue within the industry itself and to come to a realistic decision on how to combat it.”
Some more specific issues currently being dealt with by some committees include the Margo Commission report - discussions are in progress with director general of finance, Dr Chris Stals, regarding taxation - and the New Insurance Act of 1990.
Looking toward the future, Mr Geary Cooke says, “I hope to see the LOA continuing to service its members and policyholders, and to see it carry on a working relationship with state authorities.”

Copyright © Insurance Times and Investments® Vol:2.1 1st January, 1989
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