Credit life claims and complaints: who handles what, and where to take a problem

A credit life claim is decided by the insurer, under Rule 17 of the Policyholder Protection Rules, while the lender is recorded as loss payee for the debt. If a claim is declined, or the cost or terms break the credit life regulations, you can go to the insurer, the National Financial Ombud Scheme or the National Credit Regulator.

Who handles a credit life claim?

Two parties are involved, and they have different jobs.

The insurer assesses and pays the claim. Rule 17 of the Policyholder Protection Rules (Long-term Insurance), 2017 governs how: it must run a claims management framework that assesses claims after reasonable steps to gather and investigate the relevant information and that does not impose unreasonable barriers on claimants (Rule 17.2.1).

The credit provider is the party paid for the debt. Where a policy was arranged by the lender, section 106(5)(d) of the National Credit Act says the lender must be a loss payee under the policy up to the settlement value at the occurrence of an insured contingency only, and any remaining proceeds must be paid to the consumer. Where you substituted your own policy, Rule 3.2.2 requires the insurer, within a reasonable time after the lender requests it, to confirm in writing that the policy is in force and that the lender is recorded as beneficiary, cessionary or loss payee.

If you are unsure who to tell first, tell both. A claim made to an intermediary, binder holder or other mandated service provider is treated as received by the insurer itself (Rule 17.4.3).

What does the insurer have to do once a claim is made?

Rule 17.8.4 treats a claim as received on the day the insurer, its representative, or a mandated intermediary or service provider receives notification of it. Within a reasonable time that party must acknowledge it and tell the claimant the process, with contact details for the person or department handling it, indicative timelines and any outstanding requirements.

Rule 17.8.3 requires the insurer to tell the claimant what information is needed, where, how and to whom the claim and related information must be sent, any time limits on submitting claims, any administrative fee for managing the claim and the claimant's other responsibilities. Rule 17.8.5 limits requests to information or documentation that is essential to assessing the claim. Rule 17.8.7 requires the claim to be recorded by the first business day after it is first received.

Rule 17.6.1 requires the insurer to accept, repudiate or dispute the claim, or its amount, within a reasonable period. Rule 17.6.2 requires written notice of the decision within 10 days of taking it. Rule 17.8.6 gives you a right to be kept informed of progress and delays.

If your credit life policy is written as a microinsurance policy, Rule 2A.8 may also apply. It requires the insurer to assess a claim within two business days after receiving all required documents, with a further 14 business days if it disputes the claim (Rules 2A.8.1 and 2A.8.2), and it bars repudiation for non-disclosure of information the insurer did not specifically ask for (Rule 2A.8.3). Whether your policy is a microinsurance policy is a question for the insurer.

What happens to your instalments while you wait?

The Rules cited here do not suspend your obligations under the credit agreement. Talk to the lender early and tell it that a claim has been made.

If you fall behind, section 129(1)(a) of the National Credit Act allows the lender to draw the default to your attention in writing and to propose that you refer the agreement to the National Credit Regulator for debt intervention, or to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction. Under section 129(1)(b), a lender may not start legal proceedings to enforce the agreement before it has given that notice and met the further requirements of section 130.

Section 129(3) lets you remedy a default at any time before the lender has cancelled the agreement by paying all the overdue amounts together with the lender's prescribed default administration charges and reasonable costs of enforcing the agreement up to that point. These are rights under the Act. How they apply to your account is a matter for the lender, a debt counsellor or a lawyer. Our guide on debt review and complaints covers the debt side.

What if the claim is declined?

Rule 17.6.3 says the written notice of a repudiation or dispute must be in plain language and tell you:

1. the reasons, in enough detail for you to dispute them;
2. that you may make representations within not less than 90 days after you receive the notice;
3. the details of the insurer's internal escalation and review process;
4. your right to complain to an ombud, with contact details and time limits; and
5. the policy's time limit for legal action, or, if there is none, the prescription period under the Prescription Act, 1969.

If you make representations, Rule 17.6.5 gives the insurer 45 days to decide, and Rule 17.6.6 requires further reasons and the facts behind the decision if it stands by it.

Check the reasons against regulation 4. Regulation 4(1) says credit life may exclude or limit cover only in the circumstances in its table, for example death or disability from alcohol or drug abuse, suicide, criminal activity or hazardous activities, or, for job loss, resignation, retirement, misconduct dismissal and voluntary retrenchment. Regulation 4(2) says those exclusions must be explained to you when the credit agreement is entered into and at regular intervals afterwards. Our guide on what credit life covers and excludes goes through the table.

If the reason given is not in the table, say so in your response and ask the insurer to explain in writing which provision it relies on.

Rule 17.10.1 stops an insurer from denying a claim without a reasonable investigation and from dissuading you from using an attorney or adjuster. Rule 21.1 limits the effect of an untrue statement or a non-disclosure on the policy to cases a reasonable, prudent person would consider likely to have materially affected the risk assessment.

Where do you complain about the insurer?

Start with the insurer. Rules 17.5 and 18.6 require an escalation process, and Rule 18.7.2 says that if a complaint is rejected the insurer must give clear and adequate reasons and explain how to escalate it, including relevant time limits.

The National Financial Ombud Scheme (NFO) began operating on 1 March 2024 by merging four earlier schemes, including the Credit Ombud and the Ombudsman for Long-term Insurance. It deals with insurance and credit complaints, says its service is free to the complainant and says it can look at a complaint only after you have first lodged it with the insurer or credit provider.

The Financial Sector Conduct Authority supervises the market conduct of insurers and takes enquiries and complaints about legislative matters.

Where do you complain about the lender or the cost?

If your concern is that a credit provider has broken the National Credit Act, for example by demanding insurance that is unreasonable or at an unreasonable cost (section 106(2)), by not telling you of your right to substitute (section 106(4)(a)), or by charging more than regulation 3 allows, section 136(1) lets any person submit a complaint to the National Credit Regulator (NCR) in the prescribed manner and form. The NCR describes its role as investigating complaints and enforcing the Act.

Regulation 3(6) and (8) of the Credit Life Insurance Regulations strengthen that route. A credit provider must, at the NCR's request, demonstrate that the cost it charged complies with regulation 3(3), (4) and (5), and one that raises premiums to the maximum prescribed cost must, at the request of the NCR, demonstrate that the cost complies with regulation 3(7). The regulations also require credit providers to comply with the NCR's guidelines on credit life insurance, which include Guideline 003/2024.

You can also take a credit-related complaint to the NFO after first complaining to the credit provider.

What should you keep?

Keep the credit agreement, the policy document and schedule, proof of every premium, the date and form of your claim, the insurer's acknowledgement and any correspondence. Note the date you received any rejection notice, because the 90-day period in Rule 17.6.3(b) runs from receipt. Ask for decisions in writing.

How does Olvian fit in?

Olvian is a lead-referral service. If you ask about credit life, your request goes to licensed providers who pay Olvian a fee and call you back. We do not sell credit life, we do not offer or advertise credit, and we cannot assess or influence a claim. For a claim or a dispute, use the routes above.

Sources

Checked on 31 October 2026. Olvian is not a financial services provider and this guide is information, not advice.

• Credit Life Insurance Regulations, 2017, Government Gazette 40606, 9 February 2017
• National Credit Act 34 of 2005, section 106, section 129 and section 136
• Policyholder Protection Rules (Long-term Insurance), Rule 17: claims management
• Rule 18: complaints management, Rule 3: credit life insurance, Rule 21: misrepresentation and Rule 2A.8: claims
• National Credit Regulator, Guideline 003/2024 and NCR home page
• National Financial Ombud Scheme: media release of 28 June 2024 and home page
• Financial Sector Conduct Authority