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Issue Number 13 |
| OMBUZZ |
IN THIS ISSUE
TWENTY FIVE YEARS OF SERVICE
A quarter of a century ago, on 3 January 1985, the Ombudsman for Life Assurance scheme was launched.
It was the first financial services ombudsman scheme to be founded in South Africa. Judge PJJ Wessels, a retired judge from the Appellate Division (now the Supreme Court of Appeal), took office as the first Ombudsman.
The establishment of the scheme arose out of the realisation that consumers and the industry needed a method – outside the court system – to resolve disputes that they could not resolve between themselves. In the first year 31 insurers agreed to be bound by the rules of the scheme.
The key elements of the scheme were:
- the ombudsman would be independent and would not take instruction from anyone regarding the exercise of this authority;
- the service would be free to complainants, and the industry would bear the costs of the scheme;
- the ombudsman could take considerations of equity into account;
- the process would be confidential;
- complainants would not lose their right to follow the court process if they were dissatisfied with the resolution;
- there was no monetary limit on the complaints that fell within the jurisdiction.
The institution of an ombudsman scheme as an out-of-court dispute resolution mechanism is now firmly established but was ground breaking at the time. Almost all financial services in South Africa now have an alternative dispute resolution scheme such as an ombudsman or adjudicator whether voluntary or statutory. The concept of an ombudsman has also spread to other industries as diverse as the motor industries and dental services. Worldwide the ombudsman concept is a growing trend.
Our own scheme has grown and developed over the years (with a slight change of name). In the first year of operation 55 written complaints were received; in comparison, last year our office received 9 087 complaints. In line with schemes both locally and internationally our scheme is constantly improving and adapting to the needs of complainants and the industry. What has not changed is the emphasis on mediation and conciliation to settle disputes, although rulings (binding on insurers) can be made as a last resort. The tradition of appointing a retired judge as an ombudsman has also continued to the present.
INFO 2010
It is fitting that in this landmark year we will host, together with the other voluntary financial services ombudsman offices, the 2010 Conference of the International Network of Financial Services Ombudsman Schemes (Info 2010). The conference, which takes place annually, will be hosted at the BMW Pavilion in the Cape Town Waterfront from 28 to 30 September 2010. The conference website is http//www.info2010.org.za. Registration will open February 2010.
LIFE INSURANCE IN SOUTH AFRICA – A COMPENDIUM
A book giving a perspective of life insurance from the point of view of this office has just been published. The book was written by Judge PM Nienaber (the previous Ombudsman) and Prof. MFB Reinecke of our office, while other staff members assisted the authors with input. Part user-manual, part legal textbook, liberally dotted with case studies and examples, the book is aimed at anyone with an interest in the life insurance industry – policyholders, financial advisers, consumer groups, members of the industry, the legal fraternity and the financial press. Although the book is about life insurance as encountered and observed by this office its scope is wider than that. The authors used experts outside the office to assist where wider issues are discussed.
The book is published by LexisNexis and will be available in academic bookshops at a cost of approximately R357,00.
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We received 9 087 complaints in 2009, the second highest number ever. This is a 9,6% increase from 2008. 5 330 of the complaints translated into full cases where we had to do investigations. The increase in the number of complaints can be attributed to the economic situation and increased consumer awareness. We managed to resolve 5 373 cases this year (4 282 in 2008). 41% of cases were resolved in favour of complainants. R102 394 655 was recovered for complainants in the form of lump sums. A further R516 373 was paid by insurers to complainants as compensation for inconvenience caused by maladministration, including poor service. 414 of the resolved cases were “cost cases” that had been held over from previous years while we awaited certainty on the legal position by way of court judgments.
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Next month the office will lose the services of two of its stalwarts when they “retire”. Don McKay, a previous Deputy Ombudsman, has been with the office for 17 years. Giel Reinecke, professor emeritus and co-author of the above-mentioned book, leaves after 6½ years. Both will fortunately be available to the office in a consultancy capacity in their fields of expertise. We said good-bye this month to Lihle Sidaki who left the office after 4 years to go to the Cape Town Bar. We wish him well in what we are confident will be a successful career. |
For more information about the office and its activities, please visit our website: www.ombud.co.za
Third Floor, Sunclare Building, 21 Dreyer Street, Claremont, Cape Town, 7700
Private Bag X45, Claremont, Cape Town, 7735
(T) +27 21 657 5000
(F) +27 21 674 0951
(E) info@ombud.co.za
Ombudsman Sharecall: 086 010 3236
Disclaimer:
Ombuzz is published for general guidance only. The information it contains reflects our policy position at the time of publication. This information is neither legal advice nor a definitive binding statement on any aspect of our approach and procedure. The case studies are based on actual complaints we have dealt with.
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