In­sur­ers may now ap­peal om­buds­man’s rul­ings

Weekend Argus (Saturday Edition) - - PERSONALFINANCE - AN­GELIQUE ARDÉ

Your short-term in­surer is bound by “fi­nal rul­ings” handed down by the Om­buds­man for Short-term In­surance (Osti) and does not have the right to ap­peal these rul­ings. Nor do you, as a pol­i­cy­holder, have the right to ap­peal the Osti’s rul­ings – but you are free to take your in­surer to court if you aren’t sat­is­fied with the out­come of a com­plaint to the om­buds­man. How­ever, this would be at your own ex­pense.

But as of next month short-term in­sur­ers and con­sumers will be able to ap­ply for leave to ap­peal a fi­nal rul­ing handed down by the Osti, om­buds­man Den­nis Jooste an­nounced this week.

Most com­plaints han­dled by the Osti are re­solved by me­di­a­tion or non-bind­ing rec­om­men­da­tions, but a fi­nal – or a for­mal – rul­ing is one that is bind­ing on the in­surer but not on the pol­i­cy­holder.

Jooste says the in­tro­duc­tion of an [in­ter­nal] ap­peal tri­bunal is good news for con­sumers. “It can only be to the ad­van­tage of the con­sumer, be­cause the con­sumer gets an­other free bite at the cherry,” Jooste says.

It does not cost you any­thing to lodge a com­plaint at the Osti, but it does cost your in­surer. The Osti’s of­fice charges the in­surer a fee per com­plaint sub­mit­ted, and the rev­enue gen­er­ated cov­ers the costs of the om­buds­man’s of­fice.

The Osti is a vol­un­tary scheme (as are the Om­buds­man for Long-term In­surance and the Om­buds­man for Bank­ing Ser­vices), as op­posed to a statu­tory scheme (such as the Om­bud for Fi­nan­cial Ser­vices Providers and the Pen­sion Funds Ad­ju­di­ca­tor). The Osti has ju­ris­dic­tion over all short­term in­sur­ers that are con­trac­tu­ally com­mit­ted to the terms and con­di­tions of the scheme.

Both statu­tory om­buds al­low for ap­peals to the Fi­nan­cial Ser­vices Board’s Ap­peal Board, and vol­un­tary om­buds (other than the Osti) also have their own ap­peal mech­a­nisms.

Barry Scott, chief ex­ec­u­tive of the South African In­surance As­so­ci­a­tion, says an ap­peal mech­a­nism is good prac­tice, and its in­tro­duc­tion is to bring the Osti in line with other om­bud schemes.

“An om­buds­man won’t get it right in ev­ery sit­u­a­tion, and the in­dus­try – as well as the con­sumer – will some­times have a dif­fer­ent view.”

Jooste stresses that both in­sur­ers and con­sumers will be en­ti­tled to ap­peal a fi­nal rul­ing “pro­vided that leave to ap­peal is granted by the om­buds­man”. Call Den­nis Jooste, the Om­buds­man for Short-term In­surance, on 0860 726 890. Or you can fax to 011 726 5501 or email info@osti.co.za

Ac­cord­ing to the rules that ap­ply to ap­peals, which can be found at www.osti.co.za, the om­buds­man will grant leave to ap­peal only where he is of the opin­ion that:

◆ There is a rea­son­able prospect that the ap­peal, ei­ther in whole or in part, if pros­e­cuted, will suc­ceed; and

◆ The mat­ter is com­plex or dif­fi­cult; or

◆ The rul­ing or find­ing in ques­tion in­volves is­sues or con­sid­er­a­tions that are of sub­stan­tial in­ter­est or im­por­tance to the pub­lic or the in­dus­try, or it is in the in­ter­est of jus­tice or pub­lic pol­icy that the rul­ing or de­ci­sion is con­sid­ered by an ap­peal tri­bunal; or

◆ The rul­ing or de­ci­sion in­volves prin­ci­ples of law where the law may be uncer­tain or un­set­tled; or

◆ The mat­ter in dis­pute in­volves the ju­ris­dic­tion of the om­buds­man to en­ter­tain the dis­pute; or

◆ The is­sues are of such a na­ture that the judg­ment or or­der sought by the ap­pel­lant will not be of aca­demic rel­e­vance only and will have a prac­ti­cal ef­fect or re­sult.

The ap­peal tri­bunal will con­sist of for­mer Chief Jus­tice Sandile Ng­cobo and for­mer Supreme Court of Ap­peal judges Peet Nien­aber and Thomas Cloete.

Jooste says: “An ap­pli­ca­tion for leave to ap­peal must be lodged within 30 days [of the om­buds­man’s rul­ing]. Par­ties may be rep­re­sented at the ap­peal hear­ing at their own cost.

“The om­buds­man may in his dis­cre­tion call on a con­sumer who is the ap­pel­lant to pay a de­posit, which shall be re­funded to the con­sumer if the ap­peal suc­ceeds. If the ap­peal fails, the de­posit is for­feited. How­ever, no cost awards can be made against the un­suc­cess­ful party.”

He says he ex­pects there to be more con­sumers try­ing to ap­peal than in­sur­ers.

He says the om­bud finds two-to-one in favour of in­sur­ers and has a 35-per­cent over­turn rate. The over­turn rate is the rate at which in­sur­ers re­verse their de­ci­sions as a re­sult of the in­ter­ven­tion of the om­buds­man, to give some ben­e­fit to the in­sured.

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