South Africa’s insurance regulatory landscape has continued to evolve, and for motor insurance policyholders, 2025 marks an important shift from rules on paper to real-world enforcement. The Financial Sector Conduct Authority (FSCA) has intensified its focus on conduct standards that govern how insurers and intermediaries design products, communicate with customers, collect premiums, and handle claims. These standards are not new in principle, but their application is becoming more practical, measurable, and outcomes-driven.
For anyone who owns or drives a vehicle, understanding what these conduct standards mean in practice is essential. They directly affect how fairly you are treated, how clearly your policy is explained, and how smoothly your claims are handled when something goes wrong.
The purpose behind the conduct standards
At the heart of the FSCA’s conduct standards is the principle of Treating Customers Fairly. This is not a slogan but a regulatory expectation that insurers must demonstrate throughout the product lifecycle. From the way a motor policy is marketed, to how premiums are adjusted, to how a claim is settled or rejected, the outcome for the policyholder matters.
In 2025, the FSCA expects insurers to prove that customers receive products that meet their needs, that information is clear and not misleading, and that service standards are consistently applied. Motor insurance has been singled out as a high-impact product because it is widely held and often the subject of disputes.
Clearer and more honest policy disclosures
One of the most noticeable changes for policyholders is the emphasis on clarity. Insurers are required to ensure that policy wording, schedules, and sales conversations are easy to understand and do not hide important exclusions or conditions in fine print.
For motor insurance, this includes clearer explanations of excesses, depreciation, wear and tear, and the difference between retail value, market value, and agreed value cover. Policyholders should also be clearly informed about circumstances that could lead to a claim being rejected, such as late premium payments, failure to disclose modifications, or the use of the vehicle for purposes not covered by the policy.
In 2025, the FSCA expects insurers to test whether customers actually understand what they are buying. This has led to improved summaries, more transparent quotations, and stricter oversight of call centre scripts and online sales processes.
Fairer product design and pricing practices
The conduct standards go beyond communication and look closely at how motor insurance products are designed. Insurers must demonstrate that their products offer fair value, meaning the benefits, limitations, and price are reasonably balanced for the target market.
For policyholders, this has implications for add-ons such as roadside assistance, car hire, scratch-and-dent cover, and credit shortfall cover. These additional benefits must be appropriate for the customer and not bundled in a way that inflates premiums without clear benefit.
Pricing practices are also under scrutiny. While insurers are allowed to use risk-based pricing, they must be able to justify premium increases and ensure that customers are informed in advance. Sudden or unexplained premium hikes are increasingly viewed as conduct risks, especially if they are not supported by changes in risk profile or claims experience.
Stricter rules around premium collection and cancellations
One area where policyholders have historically faced frustration is policy cancellation due to missed or late premium payments. The FSCA’s conduct standards require insurers to apply fair and consistent processes when collecting premiums and enforcing cancellations.
In practice, this means policyholders should receive clear warnings before a policy is cancelled, along with reasonable opportunities to remedy non-payment. Insurers are expected to consider the circumstances of the customer, particularly where debit order failures are due to bank errors or short-term financial distress.
In 2025, the FSCA is paying closer attention to cases where claims are rejected solely because of administrative lapses, especially if the insurer did not follow its own processes correctly. This is a significant development for motor insurance customers who rely on uninterrupted cover.
Improved claims handling standards
Claims handling remains one of the most important aspects of motor insurance, and it is a key focus of the conduct standards. Insurers are required to handle claims fairly, transparently, and without unreasonable delays.
For policyholders, this translates into clearer communication about what documents are needed, realistic timelines for assessment and settlement, and proper explanations when a claim is partially or fully rejected. The use of preferred repairers, the choice between original and non-original parts, and decisions around write-offs must all be explained in a way that makes sense to the customer.
The FSCA also expects insurers to monitor the performance of outsourced service providers, such as assessors and panel beaters. If poor service from a third party affects the policyholder, the insurer remains accountable.
Stronger oversight of intermediaries and advice
Many South Africans buy motor insurance through brokers or call centre agents, and the conduct standards place clear responsibilities on these intermediaries. They must ensure that the advice given is suitable for the customer’s needs and circumstances.
In 2025, policyholders should notice fewer one-size-fits-all recommendations and more meaningful conversations about how a vehicle is used, where it is parked, and what risks matter most. Intermediaries are also expected to disclose their fees and any conflicts of interest, so customers can make informed decisions.
What this means when things go wrong
The conduct standards strengthen the position of policyholders when disputes arise. Insurers are required to have effective internal complaints processes, and customers must be informed of their right to escalate matters to the relevant ombud if they are not satisfied.
Importantly, the FSCA is increasingly using data from complaints to identify patterns of poor conduct. This means individual complaints can contribute to broader regulatory action, which ultimately benefits all policyholders.
Looking ahead: what motor insurance customers should do in 2025
While the conduct standards place obligations on insurers, policyholders also have a role to play. Reading policy documents, asking questions, and keeping insurers informed of changes to risk circumstances remain essential. The difference in 2025 is that customers have stronger regulatory backing if they are treated unfairly.
The FSCA’s latest approach signals a shift towards accountability and real outcomes. For South African motor insurance policyholders, this means clearer information, fairer treatment, and a stronger voice in an industry that plays a critical role in everyday life. Understanding these standards empowers consumers to make better decisions and to hold insurers to the level of service the law now expects.
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