WeeklySA_AdminIMPROVED SERVICE:New Financial Ombudsman to streamline processes to allow financial customers to access affordable dispute resolution services
By Thuli Zungu
The offices of the short-term and long-term Insurance ombudsman put back a whooping R300 000 back into the hands of the consumer in 2020, despite the challenges that came with COVID-19 pandemic.
According to the 2020 annual report covering both offices the office of the Ombudsman for Short-term Insurance (OSTI) recorded a monetary benefit of R119 548 901.55 to consumers who approached its office for assistance.
The office of the ombudsman for long-term Insurance (OLTI) recovered R177.9 million for complainants, the report revealed.
Both offices which have a shared service agreement resolved more complaints in 2020 than in 2019.
Judge Ron McLaren, joint ombudsman for short-term (non-life) and long-term (life) insurance, complaints said in a message that the latest annual report is momentous as it is the first joint report since the “soft” amalgamation between OSTI and OLTI.
He said Chapter 14 of the Financial Sector Regulation Act, 9 of 2017, finally came into operation on November 1 2020, and OSTI and OLTI have up to 18 months to apply for recognition in terms of Section 194 of Act 9 of 2017.
Chapter 14 of the Financial Sector Regulation Act, 9 of 2017 refers to appointment of the first ombud council board and a chief ombud for the Council, giving effect to the new financial ombud system in terms of the Financial Sector Regulation Act No. 9 of 2017 (FSRAct).
The objective of the ombud council is to assist in ensuring that financial customers have access to, and are able to use affordable, effective, independent and fair alternative dispute resolution processes for complaints about financial institutions in relation to financial products, financial services and services provided by financial infrastructures.
The ombud council will recognise industry schemes, set enhanced governance and accountability requirements, and harmonise and strengthen standards of practice for each ombud scheme through rule-making and enforcement powers, to develop a uniform and consistent framework for external dispute resolution mechanisms across the financial services sector.
Judge McLaren said towards the end of 2019, the two offices concluded a shared services agreement which proposes the establishment of a joint voluntary industry ombudsman scheme to be known as the Office of the Insurance Ombudsman.
“This Agreement provides a valuable opportunity for the offices of OSTI and OLTI, as well as consumers and insurers, to learn from the shared services experience for the better implementation of the eventual new voluntary association,” Judge McLaren said.
A single website, The Insurance Ombudsman Portal, was launched and provides complainants with a single port of entry for all insurance complaints. There is a seamless transfer of telephone calls between the two offices. As at the end of the reporting year, OSTI transferred 700 telephone calls to OLTI and received 974 telephone calls from OLTI.
She said OSTI’s community outreach during the pandemic took the form of supporting new orphanages with personal protective equipment and other essential items such as baby food, toiletries, stationery and non-perishable food.
Ms Edite Teixeira-Mckinon, CEO of OSTI, said apart from resolving complaints Osti offered community service.
Teixeira-Mckinon said that in 2020, OSTI registered 11 095 new complaints, 7% more than in 2019, and closed 10 805 complaints, 17.9% more than in 2019. Of all the complaints registered in 2020, 786 complaints related to COVID-19, with 562 relating to business interruption insurance and 224 relating to travel insurance. COVID-19-related complaints comprised 7% of all the complaints registered in 2020.
Of the 10 805 finalised complaints, the majority, at 36%, related to motor vehicle disputes. This was followed by homeowners’/building disputes at 21%, commercial at 14%, and household contents at 5%. The balance of 24% is related to other types of cover and general policy queries.
