The Ombudsman for Long-Term Insurance, Judge Ron McLaren, has criticised Alexander Forbes Life for the poor handling of a disability claim that caused the complainant to suffer inconvenience and distress.
The Ombudsman said the delays his office experienced in dealing with the insurer, the incomplete responses and lack of supporting documentation from them added to the frustration the complainant had experienced throughout a stressful period in her life.
In awarding the complainant compensation for poor service in claims handling, the Ombudsman said: “The fact that Alexander Forbes still denies any wrongdoing and has not apologised reflects a worrying lack of customer care and a need for more insight on their part of how their conduct impacts on a claimant’s experience.”
The complainant’s filed a claim for disability benefit on medical grounds.
She said that from the start, the claim had been handled poorly and her disability income benefit had been terminated.
The insurer reinstated the benefit after the complaint was lodged with the Office of the Ombudsman for Long-Term Insurance.
Judging from the documentation on file, the Ombudsman was of the view that the decision-making by Alexander Forbes in terminating the benefit had been wrong.
“There was no medical information on file which supported its decision. In our view the complainant’s complaint about poor claims handling had merit,” he said.
Alexander Forbes disputed that there had been poor claims handling and regarded their decision as professional and fair.
The matter was discussed at a compensation meeting which was not convinced that there had not been poor claims handling.
The insurer was informed that “the mere statement that all outcomes were professionally reviewed and that there was fair decision making, does not make it so”.
“We regard your conduct as falling short of the service standards one can expect from an insurer. In other words, it was manifestly unacceptable service.”
The Ombudsman recommend that R7500 should be paid to the complainant.
Alexander Forbes responded that it remained of the view that the matter had been handled appropriately from the insurer’s perspective and in terms of the standards that are expected from an insurer in the claims handling process.
The insurer went on to say that as it “appreciates and values” the Ombudsman’s view, it was willing to offer an ex gratia payment to the complainant in the amount of R3500 purely as a gesture of goodwill.
The complainant rejected the offer.
The matter was again considered at an adjudicator meeting which was of the view that compensation of R7500 was the appropriate amount.
“In our view, the complainant suffered inconvenience and distress as a result of Alexander Forbes’ handling of the claim and complaint, in particular, the decision to terminate the benefit and the delay in deciding to reinstate the benefit.
“At a time when the complainant was already struggling because of her medical condition, the insurer added to her difficulties,” the Ombudsman said.
In a final determination, Alexander Forbes was directed to pay R7500 in compensation, which it did.
In another matter involving Alexander Forbes Life, the complainant claimed under a disability income benefit for a period when she was unable to work, first, as a result of a back injury sustained on duty when she fell while pregnant, and second, when she thereafter suffered from major depression.
Her psychiatrist booked her off work until end of September 2016. She resumed her duties in October 2016. The policy had a six-month waiting period which applied prior to a benefit becoming payable.
Alexander Forbes regarded the complainant’s last day of work as 1 February 2016. It had been recommended by a health assessment service that Alexander Forbes should consider approving the benefit from the expiry of the waiting period until 30 September 2016.
The claim was initially declined on the following grounds:
- Although the injury was sustained on 4 December 2014 and the member was on and off work since the injury, Alexander Forbes was only notified of the potential claim for disability benefits on 4 March 2016. Their late notification clause, therefore, became applicable.
- The medical information at hand indicated that the injury sustained did not result in a serious medical condition warranting disability benefits owing to the member being unable to perform normal duties.
A provisional determination was made after an adjudicator meeting which found that it could not be denied that the complainant was booked off, could not perform her normal duties and, therefore, experienced occupational disability, although for a limited period only.
“We fail to see why you would be of the opinion that there was no medical evidence in support of her claim while her psychiatrist diagnosed major depressive disorder, irrespective of the cause thereof,” the Ombudsman said.
A provisional ruling was made that that a disability income benefit be paid to the complainant for the period August 2016 and September 2016.
Alexander Forbes disagreed with the ruling, stating that while the original and primary complaint and claim was a back problem, there was nothing supporting the original claim.
The insurer said should the Ombudsman’s view be that the insurer considers the case on grounds of depression, it must then be noted that the complainant’s waiting period expired on 31 August 2016. The benefit for incapacity would thus, be payable only for September 2016.
In a final determination, the Ombudsman ruled that the waiting period commenced on 1 February 2016 and according to Alexander Forbes, lasted for six months. It, therefore, ended on 1 August 2016. This was previously stipulated in a letter by Alexander Forbes dated 4 January 2017.
Thus, the benefit was payable for August and September 2016.
Alexander Forbes agreed to pay the benefit for the two months.