The Treating Customers Fairly principles seem to be paying off, with fewer complaints for long-term insurance.
As Long-term insurers started to implement Treating Customer Fairly (TCF) principles, complaints against the industry dropped during 2014, said the office of the Ombudsman for Long-term Insurance.
“There seems to be improvement in the complaints handling procedures of at least some long-term insurers, if not all,” said Ombudsman Ron McLaren.
McLaren added that despite an increase in the number of policies sold, growing public awareness of the office and the role of social media, there was a decline in the number of complaints received over the past year.
The office received 9 246 written requests for assistance during 2014, a reduction of 8% over the previous year.
It finalised 3 822 complaints against long-term insurers and recovered more than R147 million for consumers, while awarding more than R450 000 in compensation for poor service.
About 74% of the cases were finalised within six months and nearly 30% were resolved wholly or partially in favour of complainants.
Reasons for complaints
The main reason for complaints in 2014 was claim rejections, due to policy terms or conditions in the policy not being met. This section accounted for 50.3% of the complaints.
The second reason was due to poor communication, service, or documents and information not being supplied. This made up 29.1% of the complaints.
Most others related to poor communication and poor service.
Other reasons included:
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Claims being declined,
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Dissatisfaction with the policy performance,
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Dissatisfaction with the surrender of paid-up values,
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Misselling of the policy, and
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Lapsing of the policy.
Treating customers fairly
While there is no specific date for the implementation of TCF regulations, according to the ombudsman, the Financial Services Board (FSB) has stated that it expects regulated entities to already be applying fair treatment principles in their overall business processes.
TCF may be one of the factors which contributed to the reduction in the number of complaints to the office, said the ombudsman.
However, McLaren said while some insurers are busy with TCF implementation, there was a discernible failure on the part of others to apply the principles.
