The office of the Ombudsman for Long-term Insurance, Judge Ron McLaren, recovered R187.7 million for consumers last year (up slightly from R184.4m in 2015), which equates to about R750 000 per working day of the year. This is according to the ombudsman’s annual report for 2016, which was released this week.

The ombudsman awarded a further R487 335 to complainants as compensation for poor service by life assurance companies. (Apart from resolving questions of liability and fairness in the handling of claims, the ombudsman has the authority to order a life company to reimburse a complainant for distress and inconvenience caused by, for example, dragging its feet when settling a claim or responding to a complaint.)

In 2016, the office received 9 871 written requests for assistance, of which 5 284 became chargeable complaints. Of these, 3 324 were finalised. Almost half of the finalised cases concerned rejected claims, and these were mainly (83%) for life cover and disability cover.

In 2015, the ombudsman’s office implemented a new operating model whereby complaints are first passed on to the assurance companies themselves for resolution. McLaren said: “Although the percentage of cases resolved wholly or partially in favour of complainants in 2016 is lower than previous years, at 28.1%, we must take into account the impact of our new operating model. If we add the cases resolved by insurers on transfer to them, this percentage rises to 37.4%.”

The ombudsman reported that it is becoming more difficult to finalise cases. Reasons include more complex products, more persistent complainants, and the impact of the new business model, which has led to simpler complaints being resolved by assurers. Despite this, the office was pleased on the whole with the turnaround rate for complaints: 78% of cases were finalised within six months.

In his report, the ombudsman finds both complainant behaviour and assurer behaviour troublesome.

The complainant behaviour issue became significant in 2015. “This is when the behaviour of a complainant takes on unreasonable dimensions,” McLaren said. “A persistent claim arises when a complainant rejects a provisional determination, leading to the requirement for a final determination.” (See “Provisional and final determinations”, below.)

In 2008, less than 1% of cases closed were the result of final determinations; in 2012, this had increased to 5.8%, and by 2016 it was 10%. “The persistence of complainants affects our productivity, as more time has to be spent on such cases.”

Life assurance companies also sometimes behave badly. “Assurer behaviour sometimes suggests a claim is being avoided at all costs,” McLaren said. “This is when the assurer demonstrably looks for reasons not to pay what appears to be a valid claim, often by raising a new defence if the original reason for declining the claim does not succeed.”

Another example of unreasonable behaviour on the part of assurance companies is expecting a claimant to prove an exclusion on which the assurer has to rely to decline a claim, instead of the assurer obtaining the information itself.

Another major concern is poor underwriting practices in which, instead of conducting proper investigations at underwriting stage, the assurer relies on a non-disclosure defence to repudiate the policy when a claim arises.

One thing on which the office prides itself is its consistency of performance. The statistics emanating from the office have been comfortingly consistent over the past three years, despite an increase in policies sold by assurers. McLaren attributes this to the stability of his staff and the low staff turnover rate.

He emphasises that his office is independent and provides a free service to the public.

“We will continue to strive to render an effective, efficient and fair complaints-resolution service for complainants and insurers,” he said in his report.

See table of top assurers here.


The office of the Ombudsman for Long-term Insurance, Judge Ron McLaren, first attempts to facilitate a settlement between a complainant and an assurer. If this fails, the next step is to issue a provisional ruling, setting out the ombudsman’s preliminary view and asking the parties whether they have any further facts or contentions to submit before the matter is reconsidered for the purpose of making a final determination. Says McLaren: “It is our experience that if a provisional ruling is made against an assurer and if it has no new evidence or submissions, the assurer nearly always accepts the office’s provisional ruling, despite the fact that it does not agree with it. In some instances, an assurer may expressly record its disagreement with a provisional ruling without formally challenging it.”

If an assurer challenges the correctness of a provisional ruling against it, a final determination may be made at a meeting of the office’s adjudicators. If a final determination is made against an assurer, the particulars thereof, including the name of the assurer, are published on the ombudsman’s website.

The office published two final determinations against assurers in 2016. In the first, it was held that adequate documents had been submitted to Bidvest Life to assess a claim, and it had not proved that it was entitled to rely on an alleged non-disclosure by the deceased or on the applicability of an exclusion clause.

The second determination, against Liberty Life, was resolved through the exercise by the office of its equity, or fairness, jurisdiction. In refusing a claim, Liberty relied on the late submission thereof. After considering the relevant facts, including the absence of any proof by Liberty that it would suffer prejudice in relation to the claim, it was decided that Liberty should process the claim.


Contact the office of Judge Ron McLaren, the Ombudsman for Long-term Insurance, at:
Sharecall: 0860 662 837
Telephone: 021 657 5000
Fax: 021 674 0951
Post: Private Bag X45, Claremont, 7735
Email: [email protected]