Major SA insurance firm in hot water

ONE OF South Africa’s biggest insurance companies is in hot water in New Zealand, after pleading guilty in that country to more than a dozen major misconduct charges – including debiting consumers’ bank accounts without their permission.

Managers at Youi, sister company of South Africa’s OUTsurance, admitted to 15 transgressions.

It was also announced this week that, as a result, Youi had been fined the maximum possible penalty of $100 000 (R993 000). According to the OUTsurance website, Youi, which stands for You Insured, is a short-term insurer which “follows the same customer-orientated approach that has made OUTsurance successful in South Africa”. The Youi website said it complied with the South African Insurance Association.

But this week the Board of the Insurance Council of New Zealand announced that Youi had pleaded guilty to 15 charges, and warned that any further misconduct on its part would result in the termination of its

council membership.

Willem Roos, chief executive of OUTsurance Holdings, Youi’s parent company, told Weekend Argus they were dealing with the matter.

He said a few unrelated incidents of misconduct had been picked up in South Africa.

“We have identified isolated instances of unacceptable sales practices in South Africa.”

“OUTsurance has also engaged our regulator, the Financial Services Board, on the matter to ensure they are fully informed,” Roos said.

He added there was no regulatory investigation into OUTsurance.

He was confident there was no “systematic problem of a similar nature” within OUTsurance relating to Youi.

In August, New Zealand’s Commerce Commission filed charges against Youi New Zealand in the Auckland District Court.

The commission alleged Youi “employed misleading sales techniques when attempting to sell policies to consumers who were only seeking a quote”.

These misrepresentations were carried out between July 2014 and February.

A statement by the board of the Insurance Council of New Zealand said Youi pleaded guilty to charges including:

Debiting consumers’ bank or credit cards without their permission.

Issuing invoices “in relation to unsolicited insurance policies” without specifying the consumer was not obliged to pay.

Making false statements to consumers. This included telling consumers their bank or credit card details were needed in order for them to receive a quote.

Making misleading statements on its website about consumers getting quotes online.

The South African Insurance Association declined to comment on the matter because Youi was not one of its members.

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