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Long-term insurance ombud recovers R193.3m despite staff constraints

May 17 2018 14:38

Cape Town - Ahead of the release of the 2017 annual report, Ombudsman for Long-term Insurance (OLTI) Ron McLaren said his office received a higher number of chargeable complaints than in 2016. 

According to a statement released on Tuesday, the ombudsman collected R193.3m for complainants despite the strain of staff losses, while "never wavering from performance standards".

“The 5 435 chargeable complaints we received were marginally higher than the 5 284 we received in 2016, but very much in line with the small increases in numbers we have received over the past two years.”

Of these, the ombudsman said 85% were finalised within six months, and 29% were completely or partially resolved in favour of complainants.

“We managed to close 3 371 full cases (3 324 in 2016) of the 4 336 we considered during the year, despite the challenges with adjudicative staff numbers due to illness and death. It required a concerted effort on our part to maintain our performance standards,” McLaren said.

A slightly higher number of written requests for assistance was received for the year - 10 786 compared to 9 871 in 2016.

Financial management in the office had a positive effect for insurers as case fees in 2017 were only 1.5% higher than in 2016, and 6.75% lower than the fees the OLTI had estimated for 2017.

The ombudsman said 49.46% of complaints were about claims denied by insurers, followed by poor service from insurers. Compensation of R531 429 was awarded to complainants in 150 complaints for poor service by insurers.

McLaren also said statistics - while they offer important insights to the year in review - only tell half the story.

“Sometimes the detail and attention given in each case is worth talking about,” said McLaren.

Cultural sensitivity

The office of the ombudsman said it takes customary law and the cultural circumstances of the insured into account when resolving complaints. as the following outcomes illustrate.

The first complaint related to a youth who died of unnatural causes in 2014 when he was about 16 years old. The insurer disputed the validity of the the young boy's alleged customary law adoption.

The insurer did not accept the complainant’s position as the legal parent of the deceased, but OLTI was of the view that the adoption was in fact legal. After much effort, it was ruled that the child was legally adopted and parties reached an amicable settlement.

In another final ruling involving a funeral policy, OLTI recognised that in certain languages in South Africa the term ‘cousin’ includes a second cousin and there is no separate word for such a family member, said the ombudsman.

The ruling was that the insurer needed to take this into account and that in fairness the claim in question should be paid.    

“We continue to search for improvement – there is no room for complacency,” said McLaren.

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ombudsman  |  money  |  insurance
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