Insurance ombuds gets record complains

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Bloemfontein - A record number of complaints were received by the Ombudsman for Long-term Insurance in 2013.

“Complaints about life policies, funeral cover and hospital cash plans top the list of complaints,” the Ombudsman said in his annual report released on Tuesday.

The report indicates the increase in complaints was driven by the increase in policies sold and a greater awareness of the Ombudsman's work.

Some R103.8 million in lump sums were recovered for complainants over the 2013 period and 33 percent of cases were resolved wholly or partially in favour of complainants.

The report said complaints of life cover and funeral policies fell from 2011 to 2013.

However, Long-term Insurance Ombudsman, Judge Ron McLaren, said it remained worrying that “rogue” funeral administrators, who collect premiums on behalf of insurance companies, did not pay over the premiums.

“This inevitably leads to a cancellation of the policy ... and non-payment of any benefit to the life insured's family.”

Complaints in the health care category related mostly to hospital cash plan increases.

“The increase in these complaints was driven by excessive claims under these policies, which has been a concern for the office over the past two years,” said the report.

McLaren said there was a growing use of social media to resolve complaints.

“People are using social media to voice their dissatisfaction with financial institutions and it is increasingly being seen as an alternative to the more traditional forms of consumer recourse,” he said in a statement.

The Ombudsman said financial institutions tend to react swiftly to social media complaints because of the threat of negative publicity.

“In turn it encourages the use of this as a medium for complaint resolution.”

MacLaren said he found that complainants wanted a fair resolution from financial institutions, not just a reliance on legal or contractual grounds. - Sapa


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