Ombudsman McLaren discusses statistics
Judge Ron McLaren is in favour of transparency when it comes to complaints data, hoping it will motivate the industry to improve service.
Complaints regarding life cover have fallen from 35 per cent in 2011 to 31 per cent in 2013. While funeral policies made up 37 per cent of the total complaints in 2011 it fell to 31.5 per cent in 2013. However, complaints in the healthcare category relating mostly to hospital cash plans increased from 9 per cent in 2011 to 20 per cent in 2013.
“The increase in these complaints have been driven by excessive claims under these policies,” said Judge Ron McLaren that took over the position of Ombudsman for Long-term Insurance in June 2013.
“This has been a concern for the office over the past two years.”
McLaren said that many insurers have improved their resolution of complaints relating to funeral cover.
“However, rogue funeral administrators continue to collect premiums on behalf of insurance companies but do not pay over the premiums collected to the insurer, which is worrying.
“This inevitably leads to a cancellation of the policy by the insurer and non-payment of any benefit to the life insured’s family.”
McLaren reported that the Twin Peaks Model of Financial Regulation is being implemented by the National Treasury. The Model will seek to strengthen the ombudsman system and requires all financial institutions to be members of an ombudsman scheme, through changes to the Financial Services Ombud Schemes (FSOS) Act.
McLaren is positive about the publication of the complaints data for the second year consecutively, and said that the publication “will encourage insurers to benchmark their standards of complaints handling against other insurers and learn from insurers who appear to be better at complaints handling”.
