Ombud for Long Term Insurance recovers more than R190m for complainants

Judge Ron McLaren, Ombudsman for Long-term Insurance

In a challenging year the Ombudsman for Long-term Insurance (OLTI) maintained a steady pace and collected R193.3m for complainants amid the strain of staff losses but never wavering from performance standards.

Ahead of the release of the 2017 Annual Report, Ombudsman Ron McLaren says, “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 85% were finalised within six months, 29% were resolved wholly or partially 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 says.

The slightly higher number of written requests for assistance received (10 786 compared to 9871 in 2016) and the 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 OLTI had estimated for 2017.

Most complaints (49,46%) are 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.

“Statistics”, says McLaren, “while they offer important insights to the year in review, only tell half the story and sometimes the detail and attention given in each case is worth talking about”.

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

The complaint related to a youth (“the deceased”) who was about 16 years old when he died during 2014 of unnatural causes. Metropolitan Life disputed the validity of the deceased’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.

A great deal of effort was given to understanding the complainant’s case and investigating a series of challenges from the insurer. Eventually it was ruled that the child was legally adopted, the insurer withdrew its appeal, the ruling remained in force 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. The ruling was that Sanlam Developing Markets needed to take this into account and that in fairness the claim in question should be paid.

OLTI aims to provide a quality service by ensuring the right people for the job – well trained, experienced, high quality staff with the right attitude, who can be retained.

This includes the right people on the governance body to ensure trust and quality through the oversight that is employed, McLaren says.

“The level of transparency about the scheme’s performance can in itself be a quality control measure. Transparency of results and processes will keep the scheme on its toes,” he says.

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

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