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Consumer Affairs
Sunday, January 1, 1989
Thumbs down for insurers

Latest figures from the SA Co-ordinating Consumer Council reveal that short term insurers have attracted a lot of complaints.
Says a spokesman for the Consumer Council, “Over the past seven months we had an average of 60 complaints per month in respect of short term insurers compared with an average of 31 complaints per month in this category during the previous 12 months.
“This represents an average increase of 94%. The increase in the number of complaints in regard to short term insurance is particularly perturbing because the rand amount per complaint is relatively high compared to that of complaints in many other categories.”
He goes on to say that complaints in general have increased very substantially over the last eight months, the last count being averages of 401 written and 1 524 by telephone per month - a total of 1 925 complaints on average per month.
Says Ben Stafford, assistant director, “It has been increasingly difficult to cope with these complaints.
“In the head office of the Council in Pretoria eight complaints officers have been busy full time, spending an average of four to four and half hours per day answering the telephone. That does not leave very much time to devote to the written complaints.”
However, it is hoped that approximately five additional complaints officers will be appointed in Pretoria early in 1989. This will not only enable the Council to cope more effectively with the increasing numbers of complaints but it will also expedite the finalisation of the complaints.
Many complaints received by the Council can be referred to specific organisations. For example, complaints about averred collusion or monopolistic conditions are forwarded to the Competition Board, and complaints about tax matters are forwarded to the Receiver of Revenue.
The main reason why staff cannot be appointed as and when required is of a financial nature.
The Council’s financial backing is mainly obtained from two sources.
In the first instance it receives grants from the Government based on budgets which have to be submitted to the Department of Trade and Industry. In addition, money is obtained from the private sector in the form of sponsorships, mostly for special projects.
The Council considers one of its main tasks the education of the consumer - the motto is to help the consumer to help himself. This is obviously a massive task, the biggest problem being to reach all consumers.
In this regard, the media can play an important role and every endeavour is made continuously to get whatever assistance is possible from the media.
“I must say that we have really had very good support from the media,” says the spokesman.
“And the response from consumers after every coverage constantly proves that consumers value any information coming their way.”
In addition to the widest possible coverage of consumer affairs in the media, the Council also embarks on a strong publicity campaign and expenditure in this regard increased from R137 000 in the 1986/87 year to R385 000 over the year to March 1988.
Meanwhile, the short term insurance industry is considering following the example of their long term counterparts and they are now also working on the appointment of an independent ombudsman.
Discussions are underway between the SA Insurance Brokers’ Association and the SA Insurance Association. The possible appointment of an independent ombudsman for the short term insurance industry, the constant actions of the Consumer Council to solve problems pertaining to short term insurance, as well as the establishment in July 1988 of the Business Practices Committee, should contribute substantially towards ensuring a better deal for consumers of short term insurance.

Copyright © Insurance Times and Investments® Vol:2.1 1st January, 1989
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