“The proactive approach to a mistake is to acknowledge it instantly, correct and learn from it,” Stephen Covey said. Insurers make mistakes too. “These mistakes sometimes generate complaints to our office. We then have to assess the effect of the mistakes and consider the remedies, if applicable. The answer depends on the nature and extent of the mistake and at what stage it took place in relation to the insurance agreement,” according to the Ombudsman for Long Term Insurance’s latest newsletter.
The Ombudsman shares a few cases to illustrate this:
|●||In case study 1 the complainant received the surrender value of her policy on the 2nd of a month and inclusive of that month’s premium. As the complainant requested the policy value in the previous month she reversed the debit order. The insurer therefore overpaid the complainant and sought to recover the amount of R20 000. Although the complainant refused to pay back the money on “technical grounds” the Ombudsman determined that the insurer was entitled to reclaim the overpayment and that in fairness to the insurer the complainant should return the R20 000 as she was not entitled to the money.|
|●||Case study 2 demonstrates a claim by a complainant that was based on the guarantee provided by the broker consultant when she invested money and received less than the initial consideration. The insurer agreed to pay the full shortfall in view of the fact that its employee, the broker consultant, had made the error.|
|●||A 3rd case study shares that a mistake by insurers can sometime be to the benefit of the complainant. In this case the incorrect portfolio was reflected and not the portfolio in which he originally invested. After some consideration the insurer agreed to the Ombud’s suggestion and the complainant benefited, at that stage, by some R70 000 as a result of the insurer’s earlier error.|
|●||In the last case study published, the insurer had to pay the complainant the difference in a retrenchment benefit originally paid on his outstanding credit card balance. The fact that the difference between death/disability and retrenchment benefit was not clearly explained via the telephonic sales process lead to the decision of the Ombudsman.|
Click here to view the Ombuzz Issue 42 that focusses on mistakes made by insurers and the legal recourse available via the Long-term Ombud.