Ombud names and shames insurers

Would you trust an insurer to do right by you and your family in the event of a disability or death if the industry’s Ombudsman’s office declared that the company’s responses to complaints was “incompetent”?

That’s the term which the Ombudsman for Long-Term Insurance (OLTI) uses when an insurer has been asked by the office to respond to a complaint from one of its disgruntled policyholders‚ and five weeks goes by without a response‚ despite a reminder.

Today OLTI revealed that during 2017‚ Nedgroup Life - Nedbank’s insurance company - was the worst late responder. By far.

For more than 30 years‚ OLTI has provided an independent mediation service to policyholders who have a dispute with their insurers. The service is free to consumers but the insurers are made to pay a per-complaint fee.

Of the 5‚435 complaints handled by the office during 2017‚ 29% were resolved either completely or partially in favour of the complainants who’d lodged complaints.

Half of those complaints related to denied claims.

“We give insurers 21 working days to respond to a complaint raised with us‚ and if we get no response in that time‚ we send them a reminder to respond within a week‚” said deputy ombudsman Jennifer Preiss.

“If we still don’t hear back from them we tell them the case is going ‘incompetent’ and that they will be charged a double fee.

“Every now and then we have to send a third reminder‚ and in those cases we charge a triple fee.”

A few years ago some insurers suggested that the Ombud’s office name and shame those insurers who were sent repeated second reminders - the ones giving the industry “a bad name”.

2017’s worst offenders are exposed in the Ombud’s annual report on its activities last year‚ which was made public on Tuesday.

Nedgroup Life was sent what Preiss called a “scandalous” 24 second reminders to respond‚ followed by funeral insurers Nestlife Assurance with 19. Safrican Insurance was sent 14 second reminders; 1Life Insurance and Alexander Forbes Life 13 each; the Liberty group and Workerslife Assurance nine each and First Rand Life seven.

“When we see a late response trend emerging‚ we meet with the insurer‚ and usually they say it’s a staffing or system problem and that they are making changes...” Preiss said.

Often that proves to be just lip service‚ she said‚ but Nedgroup Life has made significant improvements in its response times.

“I don’t think we’ve had to send them a single second reminder this year.”

• To submit a complaint about a long-term insurer‚ got to www.ombud.co.za