The latest (and hopefully last) determination by the FAIS Ombud in 2012 contains two interesting new developments.
The first quirk is that both respondents were ordered to pay the obligatory case fee of R1 000. This I find quite strange, given that there was only one complaint, and hence one case.
Interestingly, the law says the Ombud “may” order a case fee to be paid. It goes on to state that such a fee is non-refundable, “irrespective of the outcome of the matter.” This does not explain the levying of two case fees, though.
The facts of the original complaint in 2008 are summarised as follows:
Complainant maintained that he was not aware of the terms and conditions of the policy, as he had not received policy documents at the time the water damage occurred, and his broker had never informed him of the material terms of the policy.
In response to investigation by this Office, 1st Respondent maintained that the policy schedule from Quicksure was posted to the complainant. The evidence submitted by the Respondent confirmed that the policy document was posted to the Complainant, but to the wrong address.
Ombud referred to Section 47 of the Short Term Insurance Act (the SIA), which stated that a person who enters into or varies a short term policy shall be provided by the short term insurer concerned within 30 days after so entering into or varying the policy, with a copy of the document which embodies the contract of short term insurance concerned. Ombud stated that it is incumbent upon insurers or their administrators, where they are obliged by the SIA to provide the insured with a copy of the policy, to be able to provide proof that the latter have received the policy, including the date thereof. To merely state that it was posted to the insured by ordinary post without establishing that the insured had in fact received the policy, is contrary to the clear provisions of the SIA.
It was concluded that there was a joint responsibility between CDI and Quicksure, the former to have informed the Complainant of the material terms and conditions of the policy and the latter to have sent him the policy containing those terms and conditions timeously.
Respondents were held jointly and severally liable for Complainant’s loss.
The second aspect of this case is rather interesting, in that the quantum of the claim was not determined by the Ombud. She ordered that the two parties determine the loss and come to an agreed figure. Either party was welcome to refer the matter back to the Ombud for a supplementary determination if not satisfied.
The respondents offered R50 000, the complainant demanded R488 000. Not exactly on the same wavelength, in my book. The upshot of this was that the matter was referred back to the Ombud to make a ruling.
The respondents were able to back their offer with documentary proof. As far as the claimant is concerned, the Ombud said:
The complainant is well aware that he could not proffer any evidence indicating the value of the damaged goods, nor could he substantiate his claim of R488 000. He also could not produce invoices from suppliers backing up his claim. All he could produce were his own hand-written invoices, the authenticity of which could not be independently verified.
Things took an even nastier turn after this, with the complainant changing his mind after accepting the offer initially. Space does not allow us to go into that here, but you are welcome to click here to read the juicy saga.
As we see so often, the devil does not lie in the detail so much as it lies in the paperwork; For both parties.