Rosemary Ndlovu’s case shines spotlight on life insurance fraud
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Johannesburg - The crazy antics and cavalier attitude of alleged serial murderer Rosemary Nomia Ndlovu may have captured the imagination of the South African public, but what many black families have been talking about, is the fact that somehow she managed to insure a wide range of people and cash in on their policies after their deaths without raising any suspicions.
Clearly, the Ndlovu case has also exposed how easy it is to take out burial policies or life policies on individuals without their knowledge or consent, and the office of the Insurance Ombud, said she is aware that in some instances people insure up to 20 family members, but this differed from one policy to the other.
Thirty-two-year-old Zodwa Hlongwane from Devland, Johannesburg, shared a story of how her aunt fraudulently registered her late sister only to get a payout on her death.
Hlongwane lives with her two younger sisters.
“When my sister died in May last year, my aunt had an insurance policy and had registered my sister as her daughter, which was incorrect. My sister died after a short illness, as she was living with asthma. My aunt had a payout on my sister but never once shared the money with us. It is believed she got a payout of about R12 000. Family can be your biggest enemy,” she warned.
The deputy ombudsman at the Ombudsman for Long-term Insurance Denise Gabriels said the number of people allowed to be insured on a funeral policy differs from insurer to insurer.
“Of our subscribing members, we have noted funeral policies that cover extended family up to 10 and 15 members. One we know of offers cover up to 21 dependants,” she said.
So what are the rules and ethics that apply to a funeral policy?
“Applicants for insurance must answer the questions on the application form (or telephonically) fully and truthfully. With funeral policies where specific classes of persons are eligible for cover under the main member’s policy (e.g. parents, children, extended family members) it is important that the applicant correctly describes the relationship or lists people who fall into a particular class,” said Gabriels.
She further added that suspicion of fraud is one of the many defences that an insurance company could raise when declining a claim.
“If the matter had been submitted to our office by the complainant for consideration, the insurer would be requested to expand/explain their decision and reasons for not paying the claim. Our Rules also provide for a complaint to be dismissed, if we are of the view that the matter could best be decided by a court of law,” she said.
Ndlovu, a former police officer with the Tembisa SAPS, allegedly went on a killing spree, and her sister Joyce and her five children would have been target number 8, had the hired hitman not decided to have a sudden pang-of-conscience and report to the police.
In a video taken in 2018 - that circulated on social media recently - which blew wide open Ndlovu’s murderous scheme, she is heard telling two men and an undercover officer that all six of her own family members should be wiped out in a fire.
Seemingly unaware that she was being recorded, Ndlovu told the men that she would show them where her sister lives. Ndlovu told the hitmen she would check herself into a hospital two days before, in an attempt to create an alibi. The news of her sister’s passing would find her in a hospital bed. She would then head home and begin claiming insurance policies.
According to the charges, Ndlovu has orchestrated the murders of six people since 2012 by poisoning, setting fire to their homes, and arranging hitmen to kill them. Her reasons? It is alleged she committed these crimes for money from funeral and life insurance policies that she would take out on her victims.
It is alleged that she has pocketed R1.5 million by killing her boyfriend and five family members. But in March 2018, she would not succeed in killing her sister. She was caught.
Three years later, Ndlovu is now in the middle of the multiple murder trial that has been moved to the Johannesburg High Court, where Ndlovu is testifying in her defence. She has denied all the allegations against her. In October 2015, the body of her then-boyfriend Maurice Mabasa was found in Olifantsfontein and he had been stabbed about 80 times. Ndlovu allegedly received more than R416 000 in insurance claims after Mabasa’s death.
Last week, the court also heard that Ndlovu benefited over R131 000 in insurance policy payouts, following Madala Homu’s murder. She sought to explain why her cousin, Madala Homu, who was murdered in 2012, was registered as a spouse on her policy documents instead of a cousin, but Ndlovu responded that she had been honest with the insurance company during her policy application and that the mistake had been on the part of the insurance company.
Senior Executive Manager of Individual Life Administration at Assupol Life, Jacques Erasmus, said fraudulent claims amongst policyholders straddles accross three broad categories.
The first category is where syndicates are involved. Syndicated claims fraud is by far the majority of fraudulent claims received. These syndicates recruit various persons to join them, ranging from employees in the health sector, employees of the Department of Home Affairs, owners or employees of funeral undertakers and even employees of insurance companies.
“The goal of such syndicates is to create fictitious policies and claims, mainly by forgery. Some typical ploys by syndicates could include: Firstly, delaying the recording of deaths of individuals in the records of the Department of Home Affairs, and taking out policies for such deceased persons and then recording the deaths at a later stage with the intention of claiming for the benefits of the policies.
“Secondly, buying or renting of unclaimed bodies. In this scenario, the syndicate would have taken out a policy by using information obtained by way of identity theft. By using the unclaimed body, the syndicate would report the unclaimed body as being the person that was covered under the aforementioned fraudulent policy. The syndicate obtains a valid death certificate, and then claims,” he said.
On how many people one is allowed to insure on a funeral policy, Erasmus said there is no limit to the number of lives that can be covered on an Assupol funeral policy.
“The limiting factors would be how many direct and extended family members the policyholder actually has, whether the policyholder has an insurable interest in those persons, and what the premium is that the policyholder can afford to pay.”