Employer group income protection: what the Rules say when the policy ends or changes insurer

Rule 20 of the Policyholder Protection Rules requires an insurer to give at least 31 days' written notice before it ends a group policy. When a group policy is replaced, members must be told of material differences, and any new waiting period imposed on the replacement is void.

What is group income protection?

Some employees have income protection through work. The employer, or a fund, holds the policy and the employees are covered under it. You may not have a policy document of your own.

Schedule 2 of the Insurance Act, 2017 describes a "group" policy as one entered into with an autonomous association of persons, an employer or a fund, where that association, employer or fund holds the policy exclusively for the benefit of a beneficiary. A "beneficiary" under a group policy includes a member of the association or fund, or an employee, and a person that member or employee nominates.

The Policyholder Protection Rules use similar language. They define a "member" as a member of a fund or of a group scheme, and in Rule 17 (claims) a reference to a "policyholder" includes a member (Rule 17.1.1). So several of the protections in the Rules reach you even though your employer, and not you, signed the policy.

Our income protection hub describes the individual product. A policy you buy yourself is separate from group cover, and what you hold at work does not become yours to take with you unless the group policy or the scheme rules say so.

What should you find out about your group cover?

The terms of group cover are in the group policy and the scheme rules, not in the Rules we cite here. A few questions are worth putting to your employer, your fund or the scheme administrator, in writing:

1. What does the cover pay, and for how long?
2. What is the waiting period, and what does "unable to work" mean in the policy?
3. Is the benefit tied to your salary, and is it reduced by other income?
4. What happens if you leave, change jobs or retire?
5. Who is the insurer, and who decides claims?

If the answers are not in writing, ask for them to be. If you also hold an individual policy, the same answers help the provider that calls you understand what you already have. Olvian does not advise on whether group cover is enough for you.

Can the insurer end a group policy without warning?

No. Rule 20.2.4 says that if an insurer intends to terminate a group scheme policy, it must, whatever the policy says:

• give the policyholder and the regulator (the Rules call it the Authority) at least 31 days' written notice of the intended termination; and
• be able to show that it took reasonable steps to give the scheme's members notice.

Where the nature of the group scheme makes it impracticable for the insurer to notify members directly, Rule 20.2.5 requires it to give the policyholder reasonable support in giving the notice and to satisfy itself that the policyholder has given it to members.

Rule 20.2.6 then says the insurer remains liable under the policy for the shorter of two periods: 31 days after it has complied with Rules 20.2.4 and 20.2.5, or until it receives proof that the policyholder has entered into another policy giving the members cover for similar risks.

Rule 20.4 says that to show it has communicated with members, the insurer must be able to demonstrate reasonable steps to reach them using the contact details it holds. Where it has reason to believe those details are incomplete, or that the information may not reach members, it must try other appropriate channels. This is one reason to keep your contact details up to date with your employer and the scheme.

Rule 20.1 defines "termination" widely: it includes cancellation, lapsing and, where a policy renews automatically or you have a legitimate expectation of renewal, non-renewal.

What if your employer replaces the policy with another insurer's?

Employers change group insurers. Rule 20.3 deals with the case where the policyholder replaces a group policy.

Rule 20.3.1 says that if a policyholder terminates or intends to terminate a group policy, the insurer of the old policy must tell the regulator as soon as reasonably possible after it learns of it.

Rule 20.3.2 requires an insurer, before it enters into a group scheme policy, to determine whether the new policy is intended to replace or substitute for another. Rule 20.3.3 says it is prima facie evidence of that intention if the policyholder is the same person as under the earlier policy and the lives insured are substantially the same.

If it is a replacement, Rule 20.3.4 says the insurer must, at least 31 days before entering into the new policy, take reasonable steps to give members details of:

• any material differences between the terms and conditions of the new policy and the one it replaces; and
• the reasons for those differences.

Where direct communication is not reasonably practicable, Rule 20.3.5 requires the insurer to support the policyholder in giving members that information and to satisfy itself that the policyholder has done so.

Can a new insurer start a fresh waiting period?

Not under a replacement group policy. Rule 20.3.6 says any new waiting periods imposed by an insurer on a group scheme policy that substitutes or replaces a previous group scheme policy will be void.

The Rule is about new waiting periods. It does not say that the replacement policy must offer the same benefits or the same price, and it does not stop the new policy from having different terms, which is why the notice of material differences in Rule 20.3.4 matters. Read that notice when it arrives. If something in it affects you, for example a changed definition of disability or a different benefit period, ask your employer or the scheme administrator about it before the change takes effect.

What are your rights as a member if you claim?

Because Rule 17.1.1 treats a member as a policyholder for the purposes of the claims rule, the protections in Rule 17 reach you when you claim under a group policy. The insurer must acknowledge your claim, tell you the process and give you indicative timelines (Rule 17.8.4), must give you its decision in writing within 10 days of making it (Rule 17.6.2) and, if it declines, must give reasons and at least 90 days to make representations (Rule 17.6.3). Rule 17.8.9 says that where the claimant is a member, the insurer must either obtain your contact details so it can communicate with you directly or obtain your consent to communicate through the policyholder.

Our guide on what to do if an income protection claim is declined sets out that process step by step.

Can you leave a voluntary group scheme?

Where participation in a group scheme is voluntary, Rule 4.6 requires the insurer to make sure the policy obliges the policyholder to give each member the same right to end participation as an individual has to cancel under Rules 4.2 and 4.3. In an individual policy that is a 31-day window after receiving the information in Rule 11.5, provided nothing has been paid or claimed, with a refund of premiums less the cost of the cover enjoyed. Check the scheme's documents for how this applies to you.

Where do you complain?

Start with the insurer's complaints process (Rule 18). If it does not resolve the matter, the National Financial Ombud Scheme is the industry ombud for long-term insurance. It says it can look at a complaint only after you have first lodged it with the insurer, and that its service is free to the complainant. Questions about your employment terms are separate and belong with your employer or the relevant labour body.

How does Olvian fit in?

Olvian is a lead-referral service. If you ask for income protection, we pass your request to licensed providers who pay us a fee and call you back. We do not advise on whether you need individual cover in addition to group cover, on how much, or from whom. The provider that calls you can explain how an individual policy works alongside what you have at work.

Sources

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

• Policyholder Protection Rules (Long-term Insurance), Rule 20: termination of policies
• Rule 4: cooling-off rights
• Rule 17: claims management
• Rule 2: definitions
• Insurance Act 18 of 2017, Schedule 2: classes and sub-classes
• National Financial Ombud Scheme