Gavin Came, CEO of Sasfin Wealth and a director of the FIA
Proposed changes to the long-term policyholder protection rules have been welcomed by the Financial Intermediaries Association of Southern Africa (FIA). The amendments propose to set a limit of 90 days after a claim is lodged for long-term insurance companies to decide whether to reject or dispute a claim. The recommended revisions to the rules cover claims for death, disability and dread disease benefits.
“The FIA welcomes these client-friendly proposals which will limit unnecessary delays in claims, particularly because these take place at a stressful time for our clients and their families such as in instance where a death or disability has occurred,” says Gavin Came, CEO of Sasfin Wealth and a director of the FIA.
He says while financial intermediaries play an important role in liaising with insurance companies to expedite claims, the benefit of the proposed changes to the rules is that they will create statutory time limits that will ensure that insurance companies limit claim delays. The amendments are open for public comment and if approved, will become effective on 1 January 2010.
The proposal’s aim is to ensure quick decision-making by insurers and require that policyholders must be informed of the reasons why a claim has been rejected or part of a claim is being disputed within three months of the submission of the claim. Came says one of the main reasons why insurance companies reject long-term insurance claims is because of non-disclosure by the insured. “As a simple example, if a person takes out life insurance knowing that they suffer from a dread disease such as cancer and they do not disclose this in the application, the insurance company may reject the claim if that person dies or becomes disabled,” he says.
Making use of the services of a professional financial services intermediary certainly helps, because they will make sure their clients fill out application forms correctly and when it’s time to claim, they will assist in supplying the necessary information to the insurance company. Thereafter, they will follow up on behalf of the insured or their family. ”The life insurance industry is highly competitive,” says Came. “Processing claims is an important feature of that competitiveness so sometimes, if all the paperwork is in order, claimants can receive payment in as little as a few days.”
The proposed new rules also stipulate that policyholders must be informed about alternative dispute resolution mechanisms available to them including the courts, and must be given no less than six months after the expiry of the 90-day period after the submission of a claim within which to make representations to the insurance company.
“These new proposals will certainly result in an improved sense of comfort for policyholders,” says Came.
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