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Clarifying the OSTI’s role – It’s all about a balance of probabilities

As intermediaries, we have a very important role to play when a dispute arises between a client and the insurer. Understanding the roles of the various parties can help us retain clients by arriving at an amicable settlement.

“OSTI remains an independent organisation. It continues to deliver fair and just outcomes,” the chairman of OSTI’s board, Haroon Laher, recently noted. Understanding the Ombudsman for Short-term Insurance’s (OSTI) role in resolving disputes is essential to developing a better relationship between OSTI, insurers and policyholders. Amid a possible increase in disputes as a result of the current pandemic and possible consequences, a recent article published in OSTI’s Briefcase addresses its independent and impartial role.

“The general expectation of almost every complainant in our office is that, because they are paying their premiums, their claims, which are true and honest, should be honoured by the insurers,” according to the article. We have, of course, seen many instances where claims are not so “true and honest” as they would have us believe.

A quick overview of the roles

Insured (Complainant’s) role

For an insured to have a valid complaint against the insurer, the insured is required to demonstrate that she/he has a valid claim in terms of the insurance policy.
The insured is required, not only to allege, but also to prove the claim, which involves the presentation of substantive evidence.
The onus is on complainants to provide OSTI with the evidence on which they rely to support their claims.

OSTI’s role

The outcome of a complaint is determined by weighing the version of events on a balancing scale of fairness, reasonableness and human experience to establish what is more likely or probable.
This exercise is called deciding a case on a “balance of probabilities” and refers to the standard test used when deciding civil disputes.
OSTI cannot give legal advice to the parties about a specific complaint, as this would compromise its ability to act independently in resolving the dispute.
We have seen examples in other dispute resolution forums where the clients were patently guided through the process, creating the distinct impression that that body was biased. This was also confirmed on a number of occasions by the now extinct Appeal Board of the FSB.

Insurer’s role

Insurers are also required to provide evidence to support their stance and defences on each matter.
The cooperation of the insurer also has a bearing on the time it takes to resolve a complaint against it.
In circumstances where the insurer avoids liability because of an exclusion or exception in the policy, the duty to prove the exclusion or exception lies with the insurer.

OSTI therefore gives both parties a chance to present their case and tell their story which mitigates against the escalation of the conflict.

CEO of OSTI, Teixeira-McKinon salutes her team for rising to the occasion with empathy, understanding and a willingness to assist both colleagues and those applying for adjudication. This, she believes, underlines the importance of the human touch in the process. While OSTI does have a fast-track procedure for more easily resoluble cases, these only account for around 30% of matters. “All others need engagements and probing, and some are resolved months later. Adjudication is quite complex, and I don’t know if robotics can ever really apply equity and fairness to outcomes,” admits Teixeira-McKinon.

Click here to read the article as published in the latest OSTI Briefcase.

Click here to read more about Edite Teixeira-McKinon, CEO of OSTI who took the helm at OSTI just as the COVID-19 pandemic struck.

Claims relating to homeowner’s and household contents insurance collectively constitute the second largest number of complaints lodged. Some of these OSTI cases will be discussed in next week’s Monitor.

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