Life assurance companies are settling far more of your complaints, because they realise they haven’t treated you fairly, the life assurance ombudsman said when he released his annual report this week.
His comments echo those made by Advocate Deanne Wood, the Ombudsman for Short-term Insurance, in her annual report released recently.
Judge Ron McLaren, the Ombudsman for Long-term Insurance, says there is an increasing awareness among assurers of the principles of Treating Customers Fairly (TCF), which the financial services regulators are applying within the context of existing legislation and which will be enhanced in new legislation.
But McLaren says there is still a discernible lack of appreciation of the principles of TCF by some of the assurers that subscribe to his office.
The ombudsman received 9 815 written requests for assistance last year, six percent more than the previous year. The ombudsman’s mandate permitted his office to address 5 018 of these cases.
His office referred 2 753 cases to the relevant assurers, of which 643 were settled quickly in policyholders’ favour. The rest were referred back to the ombudsman’s office.
Over the calendar year to the end of 2015, the ombudsman dealt with and finalised 3 491 cases.
His office found in favour of policyholders in almost 30 percent of the complaints and recovered almost R184.4 million for them.
The ombudsman also has the discretion to order a life company to compensate you if, for example, its maladministration has materially inconvenienced you or caused you distress or financial loss.
The ombudsman’s interventions resulted in life assurers coughing up R537 000 in 2015 to pay policyholders who were at the receiving end of poor service.
There was an increase in the number of complaints about funeral cover, from 31 percent to 35 percent of all claims, making it the biggest category of complaints.
Jennifer Preiss, the deputy ombudsman, says this is the result of an increase in the number of people taking out this cover.
Life assurance claims were responsible for 31 percent of complaints, but this cover is also more common than other types of life assurance cover.
Complaints about policies offering cover for health “events” declined from 20 percent in 2013 to 14 percent last year.
Preiss says the decline can be attributed to the fact that some assurers have stopped offering this type of cover, while others have introduced stricter controls on the policies and claims.
The ombudsman’s office offers a free service for resolving complaints.
Although the ombudsman’s office is a voluntary scheme funded by the life assurers, a recent independent audit of the office found that it complies with seven principles set by the International Network of Financial Services Ombudsman Schemes network.
Preiss says the office has revamped its website, including its online complaints facility.
The website now includes complaints statistics. Take care when using such statistics to draw conclusions about life assurers. Typically, there will be more complaints about life companies that have a large number of policyholders. The ombudsman’s office is not able to show the number of complaints it receives in relation to the number of policies each life assurer issues.