Role of the in­sur­ance om­buds­man

Kapi-Mana News - - OPINION/NEWS -

The In­sur­ance and Sav­ings Om­buds­man Scheme ser­vice is free and in­de­pen­dent and han­dles com­plaints from cus­tomers about fi­nan­cial ser­vice providers.

Com­plaints can be about loans, su­per­an­nu­a­tion, health and life in­sur­ance, car in­sur­ance, con­tents in­sur­ance, house in­sur­ance and in­vest­ments.

One of the com­mon dis­putes the In­sur­ance and Sav­ings Om­buds­man (ISO) deals with is al­leged non-dis­clo­sure to the in­surer of all ma­te­rial in­for­ma­tion.

An in­sured party has a duty to dis­close to the in­surer all in­for­ma­tion that a pru­dent in­surer would con­sider ma­te­rial.

Things are ma­te­rial if the in­surer’s de­ci­sion to is­sue in­sur­ance, or on what terms, would be in­flu­enced by the in­for­ma­tion.

The in­sured’s duty is breached even if the non-dis­clo­sure is un­in­ten­tional.

It is very im­por­tant to dis­close all ma­te­rial in­for­ma­tion be­cause non-dis­clo­sure al­lows the in­surer to avoid the pol­icy (no-pay claims) and keep the pre­mi­ums. Com­mon things peo­ple ‘‘for­get’’ to dis­close are past med­i­cal con­di­tions, driving of­fences, past claims, prior de­clined cover, mod­i­fi­ca­tions to ve­hi­cles (such as mag wheels that make a ve­hi­cle more of a tar­get for thieves) so pre­mi­ums will be higher.

Non-dis­clo­sure means you may lose your cover.

The ISO when in­ves­ti­gat­ing claims re­lat­ing to non-dis­clo­sure of­ten pro­vides in­de­pen­dent un­der­writ­ers with the in­for­ma­tion dis­closed and asks if the non-dis­closed in­for­ma­tion would have al­tered the de­ci­sion to of­fer in­sur­ance or the terms ( for ex­am­ple, ex­clu­sions or price).

If the miss­ing in­for­ma­tion would not have made a dif­fer­ence, then it is not a ma­te­rial nondis­clo­sure.

You can find out if your in­surer or fi­nan­cial ser­vices provider is a mem­ber of the scheme on the Om­buds­man’s web­site (iom­buds­man.org.nz).

Be­fore you go to the ISO, you need to have gone through your provider’s in­ter­nal dis­putes res­o­lu­tion process.

If you can­not re­solve mat­ters in­ter­nally you should ask for a no­tice of ‘‘dead­lock’’.

You pro­vide this no­tice to the ISO to show you have com­pleted the provider’s in­ter­nal process.

If your provider is a mem­ber of the ISO scheme, you can com­plete the ISO com­plaint form.

Send that, plus your no­tice of dead­lock and other sup­port­ing doc­u­ments, to the ISO by post or email (PO Box 10-845, Welling­ton 6143, info@iom­buds­man.org.nz).

Once the ISO of­fice re­ceives your com­plaint, it will ob­tain your file from your in­surer and make any other in­quiries.

A case man­ager will in­ves­ti­gate your com­plaint, dis­cuss is­sues with you and get any ex­pert as­sis­tance needed.

The ISO may try to re­solve your com­plaint by ne­go­ti­at­ing me­di­a­tion or con­cil­i­a­tion. The ISO pro­vides the con­cil­lia­tors and me­di­a­tors and will en­sure any res­o­lu­tion is fair and rea­son­able.

If a res­o­lu­tion is not agreed, the case man­ager will make a de­ci­sion on the out­come of your com­plaint.

If both par­ties ac­cept the out­come, this be­comes fi­nal. Ei­ther party can re­quest the ISO to re­view the out­come if new in­for­ma­tion or grounds ex­ist.

The ISO will not re­view the mat­ter just be­cause you don’t agree with the out­come.

If you do not ac­cept the out­come, you can take your dis­pute to the Dis­putes Tri­bunal or to court.

The ISO’s Award is bind­ing on your in­surer/ fi­nan­cial ser­vices provider, which must com­ply with the out­come.

You are en­ti­tled to be rep­re­sented through­out the ISO in­ves­ti­ga­tion process.

Check your in­sur­ance pol­icy to make sure you know who the ben­e­fi­ciary is.

If you take out a life in­sur­ance pol­icy, you can ei­ther be the ben­e­fi­ciary (the money will go to your es­tate on your death) or name some­one else as the ben­e­fi­ciary (the money goes to them and is not part of your es­tate).

If you have cho­sen to name the ben­e­fi­ciary, it is im­por­tant you know who you have named and change the pol­icy if your cir­cum­stances change.

It is com­mon for spouses and de facto cou­ples to name each other. That is fine so long as you are still to­gether, but if you sep­a­rate or one dies you need to change your pol­icy.

If you do not do so, the pro­ceeds of the pol­icy will still go to your ex- part­ner or their es­tate and usu­ally that will not be your pre­ferred out­come.

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