Can TCF really transform the industry?

Jonathan Faurie, FAnews Journalist

Is Treating Customers Fairly having the desired impact on the industry? While the majority of insurers and advisers in the industry see the value and adhere to the principles of TCF, there is still an element that does not.

Taking a chance?

The office of the Life Ombudsman (Ombud) recently released its annual report, and a case that it profiled shows the extent of wrongdoing that a particular insurer went to.

The complainant lodged a claim under an income protection policy on the basis that he had suffered a permanent disabling back injury a few months after the inception of a policy in 2011.

In a provisional ruling, the Ombud upheld the insurer’s repudiation and, in doing so, referred to information which had been furnished to the insurer by an orthopaedic surgeon who had treated the complainant.

In the provisional ruling it was said, with reference to this information, that the MRI scan shows disc prolapse.

Bending back of abuse

The complainant was not happy. Following a minor back injury in 2008, he saw a general practitioner who prescribed an ointment and he was back at work the next day. He did not see an orthopaedic surgeon.

The complainant produced a letter that disputed the letter the insurer provided the Ombud. The letter said that no MRI scan could have been performed at the hospital because the MRI scanner was only installed at the end of 2012.

The insurer then provided information that the MRI scan had not been done at the first mentioned hospital but at a second hospital where the complainant was allegedly treated on the same day that he received treatment at the other hospital.

The complainant established that the orthopaedic surgeon from the second letter practices at the second mentioned hospital in Gauteng. He further claimed that he had never received any account from that hospital. And that he never had any dealings with the orthopaedic surgeon.

The winning gambit

Further, the complainant produced a formidable body of evidence (including a number of dated photographs) which established as an incontrovertible fact that from about September 2008 until about December 2009 he lived in the Eastern Cape.

In light of this evidence, the Ombud said that the inescapable conclusion was that it was just about impossible that this doctor could have seen the complainant on 8 October 2008 or on 14 January 2009. The virtual impossibility that the doctor could have treated the complainant in October 2008 and January 2009 raised serious misgivings about the insurer’s case.

The Ombud rightly changed its original decision.

The crux of the matter

The majority of the industry does believe in TCF and follows its outcomes; but cases brought before the industry’s various Ombuds prove that there are some insurers who do not pay enough attention to the outcomes that TCF provides.

We do not know if the insurer in this case is a direct player or if they are an intermediated player because the Long-Term Ombud does not name offending companies. If this was a direct player, it is yet again another strong case for the value of an adviser. If an adviser was involved, this probably would not have happened.

We need to remember that our industry survives on trust, and it only takes one insurer or one adviser to break this trust.

Editor’s Thoughts:
We cannot get past the fact that if we want to clean up the industry we need to be serious about it; blatant offenders need to be dealt with harshly…with a heavy hand. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.