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Consumer Affairs
Sunday, April 1, 2007
Increase in complaints

The Ombudsman for Short-Term Insurance says he received more complaints than ever before in 2006, and recovered the highest amount of money on behalf of consumers. There was an increase of 24,8 % in formal complaints to 7 187, with more than R67 million being recovered.

“Despite the increase in work load the Office maintained excellent turnaround times, averaging 87 days. This can only be achieved through an excellent communication system, a competent staff and co-operation by the insurance industry,” says ex-Ombudsman, Helm van Zijl, who retired the end of last year.
His position was assumed by Brian Martin with effect from 1st January 2007.
The report highlights the Ombudsman’s concern at underwriting managers who also act as brokers, suggesting a conflict of interest. According to the Insurance Act, an underwriting manager should not deal with the public. “It is an unhealthy situation when you have a broker, underwriter and claims handler all in one person. When a claim arises this underwriting manager would reject the claim,” says Mr Van Zijl. “It is not surprising that a number of complaints received by the Office arise from the rejection of a claim by such underwriting manager.”
Once again motor complaints dominated at 65% of the total received. Commercial matters were the lowest at 3 %. The jurisdiction of the Office was expanded from May 2006 to include commercial disputes.
The Office was also granted recognition in terms of the Financial Services Ombud Schemes Act to continue operating as a voluntary Ombudsman scheme during the period under review.
The Ombudsman’s web site has been improved and consumers can now submit their complaints on-line, as well as finding useful consumer information such as the processes and procedures of the Office and hints and tips. See: www.osti.co.za
The office of the Ombudsman for Short-Term Insurance can be reached on 0860 726 890, email info@osti.co.za.

Copyright © Insurance Times and Investments® Vol:20.3 1st April, 2007
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