Not all mutual and federal insurance companies are green. The terms mutual and federal refers to two different business models. Federal insurance refers to government-mandated insurance or government owned insurance. We do not have federal insurance in South Africa. Mutual insurance companies are owned by the clients who are insured with the company. While we do not have federal insurance, we do have government-mandated insurance. These are the Road Accident Fund and Unemployment Insurance Fund. Insurance that the government obliges its citizens to pay is often considered federal insurance. In South Africa, the Road Accident Fund is one such insurance policy. It covers the medical costs of citizens injured in motor vehicle accidents. This insurance is paid for by the fuel levy added to the price of petrol, so all drivers automatically pay it. The unemployment insurance fund also runs on a similar model. The government mandates that all companies contribute to it. The insurance covers the salaries of unemployed individuals for a set time. This gives them an opportunity to find another job. It acts like salary protection. The amount paid out usually depends on the amount the insured has put in. Employers pay a percentage of the employee’s salary to the UIF. Unlike federal insurance, mutual insurance is not controlled by the government. The insureds who are covered by the mutual insurance company are in charge. A mutual insurance company operates on the principle that the insureds are the ones contributing to the company. So they should be shareholders who receive dividends. The insureds of a mutual insurance company receive rebates on the profits. The amount of say these shareholders have on decisions varies from company to company. In a traditional cooperative company, the shareholders have more say. They receive dividends based on their initial contributions. Mutual companies are based on the principle of mutuality. The dividends each shareholder receives is proportionate to their relationship with the company. To get a range of insurance quotes from companies that neither you nor the government owns, fill in our online form. Read more about insurance companies in South Africa. [vc_row css=”.vc_custom_1586440870239{background-color: #16b7e5 !important;}”][vc_column][vc_row_inner][vc_column_inner][vc_column_text css=”.vc_custom_1590757419944{margin-bottom: 5px !important;}”]
Federal Insurance in South Africa
Mutual Insurance
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