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Consumer Affairs
Thursday, May 1, 2008
Conflict of interest

The Ombudsman for Short-Term Insurance launched its Annual Report for 2007 and announced the winner of its prestigious Isabel Jones Ukusizana Award in Johannesburg late March.

Last year saw R84 million being recovered on behalf of complainants, the highest monetary value of recoveries since the establishment of the Ombudsman’s Office in 2000. The number of complaints received by the Office also increased - by 26,3%. Once again, motor complaints dominated the picture (67%) followed by building related claims (12%).
Due to the huge increase in the number of complaints received coupled with significant staff changes, the turn-around time for the resolution of complaints increased from 87 days in 2006 to 97 days in 2007.  Still of concern to the Ombudsman’s Office is the trend on the part of many insurers to rely upon external underwriting managers for the underwriting and processing of insurance related business. In many instances where the Office receives complaints, the insurer is not even aware of the existence of the policy.
“Many underwriting managers continue to wear too many hats at the same time and are not in a position to approach complaints in an objective and impartial manner”, says Brian Martin, Ombudsman for Short-Term Insurance. There is a conflict of interest as they have both sold the policy and rejected the claim thereafter. The Office also continued to experience a large volume of complaints regarding the rejection of claims made in terms of motor warranty policies.
The year under review also saw the Ombudsman making seven formal Rulings, the majority of which concerned issues surrounding non-compliance with alarm warranties and the lack of a professional driving permit.
One of the highlights during the year was the introduction of the “Isabel Jones Ukusizana” Award. This award seeks to recognise the significant contribution made by the insurance industry to the functioning of the Office of the Ombudsman and to promote consumer confidence in the industry. In January this year, three finalists were selected for their commitment to the effective resolution of complaints and their application of the principles of equity. OUTsurance took top honours with MUA Insurance Company Limited in second place and the Auto & General Group in third place. “Congratulations to our three winners on their outstanding achievement. Our Office cannot function effectively without the active co-operation of the insurance industry and this is one way in which we can recognise the efforts of insurers who go the extra mile in resolving complaints expeditiously and fairly”, says Mr Martin.
The office of the Ombudsman for Short-Term Insurance can be reached on 0860 726 890, email info@osti.co.za or www.osti.co.za

Copyright © Insurance Times and Investments® Vol:21.4 1st May, 2008
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