Small players can now fight the big players

24 April 2006 Angelo Coppola

Uncomplicated commercial and business insurance disputes to be heard by the Ombudsman for short term insurance.

From 1 May 2006 businesses that have turnovers of less than R8m per annum can turn to the Ombudsman for short term insurance to hear related commercial cases. This means that small businesses, including a sole proprietor or trader, a juristic person, partnership or trust will now have a vehicle available to them in the event that they have a claim dispute with an insurance company.

The office will handle claim disputes that relate to the following types of cover: fire and allied perils, glass, theft, motor, travel, sickness and accident and related SASRIA claims.

In the past these commercial cases were essentially handled by the courts, with long waiting periods and high legal costs, something that the smaller companies and sole traders could ill afford.

The extension of the jurisdiction has been something that many industry players have been calling for, for some time now and ombudsman Helm van Zyl says that the brief of the office is simple to hear cases and find resolution as speedily as possible.

There is one issue that remains a little grey at the moment. Van Zyl says that his office aims to resolve a matter as speedily as possible. For the more complicated cases he is obliged to hand these cases over to the FAIS Ombud Charles Pillai. The FAIS ombud wears two hats one that covers the activities of the intermediaries and secondly, and more broadly, handling cases that other ombudsmen cant handle.

Van Zyl says that generally though if his office cant handle a complicated commercial case, its unlikely that the FAIS ombud could handle the case. The answer - well its off to court.

Turning back to the short term insurance ombudsman and his jurisdiction the upper financial limit is set at R800 000, although there have been cases where the office has persuaded insurers and agreement has been reached, resulting in the limit being increased and the dispute is settled. Van Zyl says that insurers have been co-operative in this regard.

Strictly speaking van Zyls office has jurisdiction for three years, but there has been at least one case where a four-year old dispute was heard and settled. Van Zyl says that its all a question of equity.

The letter of the law does state that the ombudsmans office has jurisdiction for three years, and this is also discussed in the specific policy details and the policy holder protection rules. But like everything in life, it is negotiable, if its a question of equity.

Editors thoughts:
* We will carry the response of the FAIS ombud, concerning his thoughts on the complicated commercial and business insurance disputes.

Quick Polls


Do you believe this is the toughest period for financial advice in many years?


Yes, it’s hard to navigate the challenges and difficult to adapt. I’m struggling.
No, I have managed to navigate the challenges and have adapted. I’m good.
50/50. I just feel like whether we like it or not, we have to ready ourselves for change… be resilient and scale for the future. It’s not about survival of the fittest anymore but survival of the quickest. We just have to move on with life.
fanews magazine
FAnews October 2021 Get the latest issue of FAnews

This month's headlines

IFA nuggets: Prospecting for clients
FSCA weighs in as universal life policy premiums rocket
No short cuts for the short term broker
Investment lessons worth sharing
Tightening of policy wordings… likely in the future?
Subscribe now