Long-Term Insurance Ombudsman Ron McLaren has confirmed what consumers have long accused the industry of — “behaviour that suggests that the insurer is…looking for reasons not to pay what appears to be a valid claim”.
In making that statement in his 2016 annual report‚ released on Wednesday‚ the Ombudsman didn’t name and shame any individual insurers‚ referring instead to “insurer behaviour” that made the role of his office difficult.
The Ombudsman for Long-Term Insurance (OLTI) has for the past 32 years impartially mediated in disputes between insurers selling products such as life cover‚ disability insurance and funeral policies.
The service is free to consumers‚ but each case which the office takes up costs the insurer R3‚650.
Last year 28.1% of the 3‚324 cases which were finalised by OLTI — mostly relating to life and funeral policies — were resolved completely or partially in the consumer’s favour‚ which is in line with global ombud’s office statistics.
A total of R187 million was recovered for the successful complainants — R750‚000 each working day.
Other insurer behaviour the Ombud slammed as “unreasonable” included:
*Expecting claimants to provide information to prove an exclusion instead of getting it themselves;
*Expecting them to undergo surgical procedures or electroconvulsive therapy when considering disability claims‚ despite this not being required by the wording of their policy;
*Not conducting proper investigations when a policy is taken out‚ and then relying on “non disclosure” to repudiate a claim later; and
*Handling claims badly.
Interestingly‚ in 117 cases where the OLTI was unable to find in the complainant’s favour because of policy wording‚ it ordered the insurer to compensate them — an average of R4‚165 each — for treating them really badly.
In one such case‚ a woman had claimed on her hospital cash plan for the 72 days she spent in Tara hospital for treatment of major depression‚ after the death of her teenaged daughter‚ the sexual assault of her son and the end of her engagement.
Numerous documents were requested by the insurer‚ and after she supplied them‚ she was told she also needed to provide the “day-to-day bed record” to prove continuous hospitalisation‚ even though the forms she’d already provided established that.
Five months of delays later‚ the insurer told her the claim wasn’t valid because the policy excluded hospitalisation for the treatment of mental conditions.
The Ombud told the insurer to pay her compensation for “material inconvenience and distress”.
Consumers didn’t escape criticism. A growing number were refusing to accept the OLTI’s decisions and hampering its productivity‚ McLaren said.
“Several complaints in the last year took on nightmarish dimensions… because of the unreasonable behaviour of complainants.”
Predictably the country’s biggest long-term insurers generated the most complaints last year: Old Mutual (723)‚ Liberty (587)‚ Hollard (492) and Metropolitan Life (376).
Hollard and Liberty had the highest percentage of those cases resolved in favour of their disgruntled policyholders – 35.2% and 33.6% respectively.
TMG DigitalN
Ombud report confirms behaviour suggesting some insurers ‘looking for reasons not to pay' valid claims
Long-Term Insurance Ombudsman Ron McLaren has confirmed what consumers have long accused the industry of — “behaviour that suggests that the insurer is…looking for reasons not to pay what appears to be a valid claim”.
In making that statement in his 2016 annual report‚ released on Wednesday‚ the Ombudsman didn’t name and shame any individual insurers‚ referring instead to “insurer behaviour” that made the role of his office difficult.
The Ombudsman for Long-Term Insurance (OLTI) has for the past 32 years impartially mediated in disputes between insurers selling products such as life cover‚ disability insurance and funeral policies.
The service is free to consumers‚ but each case which the office takes up costs the insurer R3‚650.
Last year 28.1% of the 3‚324 cases which were finalised by OLTI — mostly relating to life and funeral policies — were resolved completely or partially in the consumer’s favour‚ which is in line with global ombud’s office statistics.
A total of R187 million was recovered for the successful complainants — R750‚000 each working day.
Other insurer behaviour the Ombud slammed as “unreasonable” included:
*Expecting claimants to provide information to prove an exclusion instead of getting it themselves;
*Expecting them to undergo surgical procedures or electroconvulsive therapy when considering disability claims‚ despite this not being required by the wording of their policy;
*Not conducting proper investigations when a policy is taken out‚ and then relying on “non disclosure” to repudiate a claim later; and
*Handling claims badly.
Interestingly‚ in 117 cases where the OLTI was unable to find in the complainant’s favour because of policy wording‚ it ordered the insurer to compensate them — an average of R4‚165 each — for treating them really badly.
In one such case‚ a woman had claimed on her hospital cash plan for the 72 days she spent in Tara hospital for treatment of major depression‚ after the death of her teenaged daughter‚ the sexual assault of her son and the end of her engagement.
Numerous documents were requested by the insurer‚ and after she supplied them‚ she was told she also needed to provide the “day-to-day bed record” to prove continuous hospitalisation‚ even though the forms she’d already provided established that.
Five months of delays later‚ the insurer told her the claim wasn’t valid because the policy excluded hospitalisation for the treatment of mental conditions.
The Ombud told the insurer to pay her compensation for “material inconvenience and distress”.
Consumers didn’t escape criticism. A growing number were refusing to accept the OLTI’s decisions and hampering its productivity‚ McLaren said.
“Several complaints in the last year took on nightmarish dimensions… because of the unreasonable behaviour of complainants.”
Predictably the country’s biggest long-term insurers generated the most complaints last year: Old Mutual (723)‚ Liberty (587)‚ Hollard (492) and Metropolitan Life (376).
Hollard and Liberty had the highest percentage of those cases resolved in favour of their disgruntled policyholders – 35.2% and 33.6% respectively.
TMG DigitalN
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos