Arbiter berates underwriters for being meanies

Long-term insurance ombudsman Ron McLaren ordered insurers in more than 100 cases to pay complainants compensation for treating them badly.

This is contained in his 2016 annual report, released week, in which he confirms 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".

McLaren didn't name and shame any individual insurers, referring instead to "insurer behaviour".

Last year 28.1% of the 3324 cases were resolved completely or partially in the consumer's favour.

A total of R187-million was recovered for the successful complainants.

Other insurer behaviour the ombud slammed as "unreasonable" included:

• expecting claimants to provide information to prove an exclusion;
• expecting them to undergo surgical procedures or electroconvulsive therapy when considering disability claims, despite this not being required by the wording of their policy;
• relying on "non-disclosure" to repudiate a claim later; and
• handling claims badly.

In 117 cases where the ombudsman was unable to find in the complainant's favour because of policy wording, it ordered the insurer to compensate them - an average of R4165 each - for treating them 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 needed to provide the "day-to-day bed record", even though the forms established that.

Five months later the insurer told her the claim wasn't valid because the policy excluded hospitalisation for the treatment of mental conditions.