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Insurance Ombudsman rules in income benefit matters

07 September 2020 The Ombudsman for Long-term Insurance
Judge Ron McLaren, The Ombudsman for Long-term Insurance

Judge Ron McLaren, The Ombudsman for Long-term Insurance

The Ombudsman for Long-term Insurance Judge Ron McLaren has upheld a complaint against Sanlam for requesting frequent reports to support a claim for income disability benefits and ruled that an annual review would be reasonable.

In a separate matter, the Ombudsman ordered Liberty to pay R15 000 as compensation for poor service in the handling of a claim for income disability by a woman who had two mastectomies and treatment for breast cancer.

In the first case, the insured Mrs D who suffered from painful peripheral neuropathy, hypertension, asthma, reflux and bipolar disorder, complained about the numerous medical reports that were requested by Sanlam. She found it distressing and unnecessary to provide reports so frequently.

In a provisional determination by the Ombudsman, it was concluded that Sanlam was entitled to obtain, at the very least, one report from each of Mrs D’s treating specialists annually.

The adjudicator meeting was of the view that an annual review was reasonable, having reference to Mrs D’s medical condition, in particular the report from Dr T which stated; “The patient’s clinical condition has deteriorated somewhat. The neuropathy has progressed and is affecting a bigger part of her lower legs. The pain is still 10/10 (the highest level of pain) on the NRS (numeric rating scale). It is important to note that the neuropathy is a progressive and ongoing condition for which there is currently no cure.”

Dr T went on to say that the damage usually cannot be reversed - it was a permanent condition, which would probably become worse. The doctor stated that with adequate pain control, Ms D could work. However, pain control has not been achieved and there was, of course, the problem with side effects of pain medication and the other co-morbidities.

Sanlam responded that for income protector benefits, unlike lump sum disability benefits, medical validity of a claim can be accepted before maximum medical improvement (MMI) is reached. The insurer’s medical team would be guided by the client’s specialists’ assessment of the disease process, medical management and prognosis.

Sanlam said: “We tailor the frequency of reviews according to the medical evidence provided.

“We remain empathetic to the burden of the medical conditions Ms D experiences, despite her perception that we are acting somewhat punitive in nature.

“We have also noted Dr T’s medical report and the assessment of worsening neuropathy.

“However, the specialists have not noted that MMI has been reached and neither have they removed the possibility of Ms D returning to work. Their conclusion remains that with adequate control of the problem there is a possibility that Ms D can still function well in the working environment.”

Sanlam said it acknowledged Mrs D’s burden of disease that she was currently unable to work. Hence, it accepted the validity of the income protector benefit claim for the next six months, following her last specialist’s report.

However, it added: “We require follow-up reports as part of her routine medical management as outlined by her treating team. And by requesting these reports, we must respectfully point out that this is already part of her routine medical management, so it isn’t unnecessary hardship, or unreasonable requirements on our part.”

In a final determination, the Ombudsman said: “We also fully understand and support Sanlam’s right to verify the claim by requiring medical reports from medical specialists.

“However, as with any such right, it has to be exercised reasonably. We stated that Sanlam should require reports no more frequently than annually but we did not deny Sanlam’s right to require medical evidence.”

Account was taken of Dr T’s report of 7 October 2019 when it was stated Mrs D’s neuropathy had progressed and was affecting a bigger part of her lower legs. The pain was still 10/10 on the NRS. Given the range of treatments Mrs D had tried, and the fact that she could not recover from this condition, the probability that she would be able to return to work within a six-month period was remote. In addition to the neuropathy, she suffered from bipolar disorder with major depression which was impacted by the painfulness of her neuropathy.

The Ombudsman said: “The final determination is that Sanlam can request medical reports on an annual basis, but not more frequently than that.

“Requesting more frequent medical reports has an impact on the complainant’s mental state and is likely to impede her recovery rather than improve her situation. If the medical evidence at the annual assessment indicates that there is an improvement in the complainant’s pain control and mental condition, the frequency of requests for medical evidence can be reconsidered.”

Sanlam agreed to annual requests for medical evidence.

In another matter, the complainant Ms W had a mastectomy for breast cancer in November 2017. She had chemotherapy from December 2017 until June 2018. Temporary disability was granted in November 2017. Radiotherapy was completed in August 2018.

On 18 December 2018 Ms W wrote to the Ombudsman complaining that Liberty had refused to give her a copy of an occupational therapist’s report as she wanted to understand how she could improve her mental impairment. After the complaint was lodged with the Ombudsman, the report was provided to Ms W.
In March 2019, Ms W had a second mastectomy. In May 2019, she wrote to the Ombudsman complaining that she had issues with Liberty’s complaints department which did not respond to her many emails and telephone calls.

“They are making ridiculous requests while I am homebound after major surgery. Their Occupational Therapist recommended that I cannot return to work for six months but they only granted disability leave of three months.

“They’ve now asked for detailed oncologist and psychologist reports although neither of these doctors were involved in the recent major surgery. Every email from Liberty is sent by a different person.

“They are treating me badly at an extremely difficult period of my life. This is causing extreme stress, headaches, worry and emotional damage.”

After the matter was taken up by the Ombudsman, Liberty admitted to poor handling of the complainant’s claim and complaint and offered her R2500 compensation which the complainant rejected.

The adjudicator meeting noted: “The R2500 compensation is in our view far short of what should be paid in this matter. At a time when Ms W was stressed and ill, Liberty’s poor handling of her claim and complaint added to her distress. The often nonsensical and contradictory answers that Liberty gave to questions and requests added to Ms W’s frustration. Right from the start, when Liberty refused to give her the occupational therapist’s report, Liberty has been unhelpful in the handling of her claim and the complaint.”

The matter was then discussed at a compensation committee meeting and a provisional determination was made for an award of R15 000 which the insurer did not accept and instead offered R10 000. The complainant did not accept the amount.

Giving her reasons for rejecting the offer of R10 000, Ms W stated the difficulties of undergoing cancer treatment, especially chemotherapy. Her immune system was severely compromised.

“Liberty has continuously made as if I am exaggerating the situation and been booked off excessively.”

She said the way she had been treated by Liberty necessitated her having psychiatric assistance.

“Liberty gave the impression I am making this up and it is not as serious. They have made me feel like a hypochondriac. I have had to borrow money to pay my obligations due to Liberty taking so long to approve the claim.

“I hope and pray Liberty is not doing this to other cancer patients at this terrible time. If you are on chemotherapy, you have a compromised immune system and Covid-19 would be a death sentence.”

In the final determination, the Ombudsman said Liberty had not stated why it could not adhere to the request to pay Ms W R15 000 as compensation.

“Liberty had also not responded to Ms W’s further submissions as to why she could not accept their offer. The lack of reason by Liberty for its non-adherence to the provisional determination is further evidence of the perfunctory handling of this complaint,” said the Ombudsman, adding that Liberty was not complying with the Treating Customers Fairly rules.

The provisional determination that R15 000 compensation must be paid to Mrs W was confirmed as a final determination.

Liberty paid the R15 000 compensation.

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