Discovery responds to Ombud ruling against Gen Assist

In response to the article titled "Are we throwing the law and common sense out of the window?" in which Prof Robert Vivian commented on a recent FAIS Ombud ruling, Discovery Insurer's Anton Ossip has commented as follows:-

FAIS Ruling in the case of Hughes vs Gen-Assist Insurance Brokers 

There has been a lot of discussion regarding the recent ruling by the FAIS Ombud in the case of Hughes and Gen-Assist regarding underinsurance following an armed robbery. We wish to provide clarity on this case. 

Throughout its history, Discovery has successfully engaged with and supported brokers and financial advisers, who play a fundamental role across our business. Discovery Insure is committed to providing support and assistance to brokers within the ambit of regulations. 

Gen-Assist is a registered independent short term insurance broker that has built a successful business over the years on the basis of personalised client service and professional advice. 

In April 2013, Gen-Assist placed a personal lines insurance policy with Discovery Insure that unfortunately in error understated the client’s sum insured based on a quote incorrectly completed on Gen-Assist’s behalf by a Discovery Insure distribution support channel. 

At the time of loss, average was applied in accordance with the contract due to underinsurance, which was upheld by the Short-Term Insurance Ombudsman. Subsequently the client lodged a complaint with the FAIS Ombud. After reviewing the case, the Ombud held Gen-Assist Insurance Brokers liable for the shortfall.

Gen-Assist and Discovery Insure respect the view taken by the FAIS Ombud and recognise that both parties were responsible for ensuring the accuracy of the quote and policy. Arrangements have been made to ensure that the shortfall (R124 960) is to be borne by both Discovery Insure and Gen-Assist.

Regards

Discovery Insure CEO

Anton Ossip 

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