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Ironing out TCF creases becomes a tough ask

10 October 2016 Jonathan Faurie

While the Financial Services Board (FSB) is on a crusade to improve the level of customer service in the industry – with the introduction of the objectives outlined by Treating Customers Fairly (TCF) – it seems as if there are still creases in the industry which need to be ironed out in this regard.

FAnews was recently made aware of an issue in the industry relating to saXum Insurance (saXum) and Danmar Autobody (Danmar) which has put policyholders in an uncomfortable position.

Uncovering the issue

The following information was sent through to FAnews by a concerned policyholder.

There are an unknown number of Uber vehicles insured with saXum that are affected. Danmar, which is part of the Imperial Group, has allegedly not been paid by saXum for repairs being done to these vehicles. The information went on to add that Danmar are exercising a right to hold onto the vehicles.

“I have been in contact with saXum for two weeks since Danmar notified me that vehicles would not be released. It will be sorted out any day now was the official line of feedback. We are still waiting for further feedback. I was informed by Danmar that this has been an ongoing issue for two or three months; but this is still unconfirmed,” the policyholder said.

FAnews phoned the policyholder to discuss the issue further and found out that his premiums have been paid to saXum every month without fail through a debit order that goes off his bank account. Further, the policyholder paid the excess over to saXum so that they can begin with the repair process on his vehicle. He is in possession of a receipt of payment to back this up.

saXum responds

We followed this issue up with saXum. After a number of attempts to speak with the consultant that deals with the company’s public relations, saXum issued the following statement to FAnews.

With reference to your email sent to our public relations consultant today, we have the following response:

- saXum Insurance Limited (saXum) has experienced performance problems with one of its underwriting managers who were mandated, amongst other duties, to administer specific motor claims efficiently;

- The problems did indeed lead to a delay in settling outstanding invoices with Danmar, which in turn has resulted in cars being withheld by the company;

- For the past weeks, saXum has been, and is still paying invoices to Danmar on a weekly basis, and has approached Danmar to release the repaired vehicles; and

- saXum is in close contact with the FSB and Danmar to rectify the problem and is committed to finding a workable solution.

The response was penned by Dr J.A.J. Schalch who is the Executive Chairman of saXum. When talking to the policyholder, FAnews was able to obtain the name of two underwriting management agencies that are possibly involved in the case. The name of these companies could however not be confirmed with saXum at the time of publishing this article.

A word from the top

FAnews also got in touch with the FSB to find out if they were aware of the situation. Kerwin Martin, Head of Department Insurance Prudential at the FSB, responded as follows:

We can confirm that the FSB is aware of the challenges being experienced by policyholders relating to the settlement of claims by saXum. We are currently involved in extensive discussions with the management and shareholders of saXum to ensure an expeditious resolution of the matter in an attempt to alleviate possible further prejudice to policyholders.

We will continue to monitor the situation very closely to determine the appropriateness of any further action in this regard, including possible regulatory action against saXum.  The interests of policyholders remain our primary consideration in our on-going engagements with saXum on the matter.

The plot thickens

When looking at the statements from saXum and the FSB, a key issue stands out.

In their statement saXum said that the issue arose because of challenges experienced with an underwriting manager who was responsible for payments to Danmar. Yet, the FSB noted in their statement that it was saXum that was being investigated and that they are determining the appropriateness of action against the insurer and not the underwriter.Surely if the underwriter was at the heart of the issue the FSB would have indicated as such.

When speaking to the policyholder after receiving feedback from the relevant parties, he told us that he has been in further contact with saXum who have told him that the issue is still ongoing with no resolution in sight as yet. He was also not able to get a date as to when his vehicle will be released by Danmar.

Editor’s Thoughts:
The FSB has admitted that while there are companies who are embracing the principles outlined by TCF, there are companies that are struggling in this regard. What, in your opinion, is happening at saXum? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

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