Insurer ordered to pay compensation for poor service

The ombudsman for long-term insurance has ordered a well-known insurer to pay R7‚500 to a client as compensation for poor service.

Judge Ron McLaren lambasted Alexander Forbes Life for the poor handling of a disability claim‚ filed by a client on medical grounds.

McLaren said the delays his own office had experienced during their dealings with the insurer‚ added to the frustration the complainant “had experienced throughout a very stressful period in her life”.

“She said that from the start‚ the claim had been handled poorly and her disability income benefit had been terminated.”

The insurer reinstated the benefit after a complaint was lodged with the ombudsman.

“There was no medical information on file which supported its decision. In our view the complainant’s complaint about poor claims handling‚ had merit‚” said McLaren.

Alexander Forbes disputed the complaint and said their decision was professional and fair.

The matter was discussed by the ombudsman’s office at a compensation meeting.

“We regard your conduct as falling short of the service standards that one can expect from an insurer. In other words‚ it was manifestly unacceptable service.”

The ombudsman recommended that R7‚500 should be paid as compensation to the complainant.

Alexander Forbes responded that it remained of the view that the matter had been handled appropriately from its perspective.

It offered R3‚500 as a “gesture of goodwill“‚ which was rejected by the complainant.

The matter was again considered at an adjudicator meeting‚ where the original sum of R7,500 was upheld and which the insurer paid.

“In our view the complainant suffered inconvenience and distress as a result of Alexander Forbes’s handling of the claim and complaint‚ in particular the decision to terminate the benefit and the delay in deciding to reinstate the benefit.

“At a time when the complainant was already struggling because of her medical condition‚ the insurer added to her difficulties‚” said McLaren.