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On super-ombudsman and issues of short-term complaint transparency

17 April 2009 Gareth Stokes
Brain Martin, Short-term Ombud

Brain Martin, Short-term Ombud

Gareth Stokes, FAnews Online Editor

Gareth Stokes, FAnews Online Editor

A week or two after the release of the Ombudsman for Short-term Insurance (OSTI) 2008 Annual Report we travelled to Johannesburg to spend some time with Ombudsman, Brian Martin. In our half-hour discussion we touched on a wide range of challenges in the s

Could super-ombudsman come to the rescue?

FAnews Online wasted no time in chasing our transparency agenda. We suggested to Martin that consumers would appreciate it if his Office could reveal the service providers (insurers) who frequently push the ‘fairness and equity’ boundaries when resolving claims. “Is it possible for you to name and shame the service providers who repeatedly send consumers to your door?” we asked. The answer lies in the Office’s association agreement. “We’re a voluntary Ombudsman scheme, not a statutory scheme like the FAIS Ombudsman,” says Martin, adding that his office is “obliged to preserve confidentiality” unless expressly consented to by all parties. “Is that a hurdle that can be overcome in the future?” we pressed.

Martin says it would be difficult as it requires agreement from all the players in the industry. He adds that “the whole ombudsman landscape is a little uncertain at the moment because some in the industry are pushing very heavily for the creation of a single statutory ombudsman, super-ombudsman if you like.” He’s referring to the FAIS Ombudsman’s recent proposal to emulate the UK-model and create an oversight position for all consumer protection bodies in the domestic environment.

We detected signs of friction between the OSTI and the FAIS Ombudsman. Martin believes there’s been a deliberate attempt by the statutory body to “create confusion concerning the jurisdiction of the various Ombudsmen.” Regular FAnews Online readers will recall some of the FAIS Ombudsman determinations which seem to contradict or overturn OSTI decisions.

Strategies to reduce claims

After ruling out the use of scare tactics to “name and shame” repeat offenders we asked Martin what else his Office could do to reduce the number of complaints directed to it. The first port of call is education. “We’re trying to get people to understand the fundamentals of the insurance set-up,” said Martin. He believes educating short-term insurance consumers will significantly reduce the number of complaints. And it’s important that the education programmes are aimed at the right market. “In my view the [existing] education initiatives are aimed too low down in the socio-economic spectrum,” says Martin. To further promote awareness of the mechanisms of short-term insurance products the OSTI has created a DVD which they hope will be distributed as widely as possible by insurers and brokers.

Another project undertaken to reduce the load on his Office was announced earlier this year. We’ve instituted a system at the beginning of this year whereby insurers get a period of 30 days in which to resolve the complaint directly with the consumer.” We’re saying to the insurer: “You know what our stance is – you know how this office thinks and the steps they are going to follow – so rather than forcing all parties to see the matter to its conclusion – rather settle now!” In the event the consumer lets his Office know that the matter is dealt with to their satisfaction the OSTI offers the insurer a fee rebate. This scheme has met with limited success. Some insurers embrace it wholeheartedly while for others it’s business as usual.

Inconsistent feedback is a bit concern

A successful Short-term Ombudsman needs buy-in from the entire industry. Martin says his Office has been “engaging proactively with the industry to try and promote a better understanding of the work the office does and the way it approaches things.” He’s concerned that the positive feedback received at grass roots level conflicts with negative feedback about the Offices’ relationship with the industry in other circles. There are plans to address these disparate views in future months.

But the Offices’ reason for being remains the aggrieved short-term insurance customer. We mentioned to Martin that the most damning indictment on his Office was the dismal complaint turnaround published in its latest report. There are a number of reasons for the poor performance, not least of which the difficulty in sourcing and retaining appropriately skilled staff. Staff turnover – Martin has seen all the Offices’ professional staff (bar his deputy) leave in the last two years – contributes to the daunting workload “Whenever anyone leaves you get this double whammy,” says Martin. You have to re-allocate the cases on the outgoing person’s desk and wait for the new employee to get up to speed!

Editor’s thoughts: After our interview with the Ombudsman for Short-term Insurance we conclude the Office is in capable hands. Martin shows compassion for the struggling consumer and displays an intense desire to improve the lot of all the stakeholders in the industry. Do you think raising the level of short-term insurance education will result in fewer disputed claims? Add your comments below, or send them to gareth@fanews.co.za

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