Role of the Ombudsman for Long-term Insurance   Presentation to the Select Committee on Finance National Council of Provinces    Ron McLaren Ombudsman

The Office Established on 1 January 1985 Voluntary financial ombudsman scheme recognised by statute Voluntary association not for gain Independent Ombudsman’s Council Free complaints resolution service Complaints against life insurance companies Arising from policies which insure life, funeral, credit, disability, health and investment policies

Features of the office Effective, efficient and fair procedures Equity/fairness jurisdiction Independent and impartial Accountable for governance and performance only to Ombudsman’s Council No accountability to or instructions from insurers Readily accessible Confidentiality No monetary jurisdictional limit

How the office works Rules regulate complaints resolution process Informal – not a court – no lawyer required Resolution through mediation, failing which determination Provisional ruling followed by final determination Decisions binding on insurer – complainant retains other remedies Internal appeal procedure Independent external assessor Quality control

Key Statistics - 2016 Written requests for assistance - 9 871 Complaints received - 5 284 Cases and transfers finalised - 4 802 Percentage of cases and transfers resolved wholly or partially in favour of complainants - 37,4% Recovered for complainants in lump sums - R187,6m Compensation awarded to complainants for poor service by insurers - R487 334

Types of benefit in complaints finalised 2016 Funeral 35% Health 11% Life 34% Types of benefit in complaints finalised 2016 Credit Life 10% Disability 10%

Summary of cases finalised 2016 % of Total Poor service 30.75% Claims declined 49.46% Non-disclosure 5.32% Policy performance 3.55% Surrender values 1.53% Misselling 0.19% Lapsing 3.91% Miscellaneous 5.29% TOTAL 100%

Challenges and possible solutions Poor complaints handling by insurers Publication of complaints data Compensation for poor service Draft legislation aims at improvement (FSR Bill, Treating Customers Fairly and Policyholder Protection Rules) Liaison Committee