From time-to-time differences in interpretation may arise between the Insurer and the customer on the cover provided by the products sold to the client, and a simplified process is required to clarify and rule on such uncertainties.
For this purpose, the Financial Services Conduct Authority (FSCA)established the Ombudsman for Short Term insurance, or the OSTI, to act as an independent evaluator of claims that are repudiated or rejected by insurers.
Eqstra Financial Services (Eqstra) strives to deliver an optimal customer service and enjoyable experience in its market segment. Our product range and service offering cater for the unique requirements of each customer and we offer the most comprehensive range of solutions in the market.
Eqstra is a member of the short-term insurance industry and provides risk management and acceptance services through a cell captive arrangement placed with Guardrisk Insurance Company. Guardrisk is an A-grade claims settlement insurer and recognised as one of the specialist cell captive insurers in the industry in South Africa.
The OSTI will establish a basis of trust between the industry and its customer base.
Eqstra fully supports the functioning and decisions of the OSTI to ensure that there is an affordable and fair outcome to short term insurance claims that could be approached in a different manner to arrive at an amicable solution.
At the same time, it helps the short-term insurance industry to develop and have a standardised outcome on the interpretation of short-term policies to avoid unnecessary delays in decision making and prevent confusion on the extensive terms and conditions that makes up a policy wording.
Who is the Short-term Ombudsman (OSTI) and what do they do?
- The OSTI is an independent, non-profit industry Ombud arrangement consisting of industry specialists headed up by an experienced respected industry specialist that has the necessary experience and insight into the purpose of insurance and what the intention of the policy wordings are to ensure consistency in outcomes
- The OSTI provides the insuring public and the short-term industry with a free, efficient and fair dispute resolution mechanism through an alternative dispute resolution process, applying the law and principles of fairness and equity.
- The OSTI deals with personal lines short-term insurance disputes including disputes relating to –
- Motor insurance
- Homeowners insurance (buildings)
- Household insurance (contents)
- Cell phone insurance
- Travel insurance
- Disability insurance
- Credit protection insurance
- The OSTI also deals with commercial insurance in its wider aspects for small businesses and sole proprietors.
- The OSTI is not a court of law. The OSTI team examines the information and evidence placed before them by the parties to a dispute and make recommendations that are guided by the legal position and principles of fairness and equity.
- The OSTI do not, nor are they empowered to procure evidence or witnesses or investigate a complaint on behalf of one party. The complaining member of the public uses standardized complaints templates to summarize the complaint in a structured manner to ensure that the facts regarding the “unfair” treatment or undesired outcomes are provided to the OSTI to ensure a proper evaluation of the case and a fair outcome to both parties
- The OSTI operates independently of both the Financial Sector Conduct Authority and the Prudential Authority in its adjudication and dispute resolution process.
The OSTI is a member of the Ombudsman Association of South Africa and the INFO Network which ensures that complaints approaches and outcomes are shared across a variety of service providing entities and that complaints are dealt with in a structured and uniform basis, without compromising the independence of decision making.
How you can use the Ombudsman to your advantage
The benefit of using the Short-Term Insurance Ombudsman’s office means the insuring public has a say in the type of services and the quality of policy interpretation it gets. It is to the advantage of the customer to make use of the OSTI’s office, so that the independent interpretation has a meaning to it. The Ombudsman charges nothing for the services rendered by his office, so we suggest using it.
The major advantage of an ombudsman is that he or she examines complaints from outside the “offending” business, thus avoiding the conflicts of interest inherent in self-policing. The ombudsman concept involves the public who calls upon the ombudsman for assistance, and business, which may be obliged to submit to external scrutiny. The ombudsman decides on an appropriate and adequate resolution.
The ombudsman is squarely in the middle and is as fair and as objective as possible in its venture to understand the cover provided in terms of the policy, the practical implementation and the deployment of the claims process.
The advantages of using an ombudsman to resolve differences are well known:
- the process is accessible and inexpensive, or at least it is the least expensive of the legal processes.
- Its accessibility is not only financial but also intellectual.
- It is often the ombudsman explains to the insuring public how the insurance industry operates.
- The OSTI also facilitates public education, and the public is then better able to articulate complaints or expectations.
Don’t be an uninformed insured; The OSTI is there to look after your insuring interests, make use of the facility if you feel “shortchanged” on your claim.
The jurisdiction of the OSTI to consider complaints from policyholders is as follows:
Personal Lines Complaints - General complaints relating to all types of cover, except for homeowners: R3.5 million. Complaints arising from Homeowners or buildings cover: R6.5 million
Commercial Complaints - The annual turnover limit for a juristic person referring a commercial complaint to the OSTI has been increased from R25 million to R35 million.
The same quantum limits applying to personal lines complaints will apply to commercial complaints. In other words, for commercial complaints relating to all types of cover, other than buildings cover, the limit is R3.5 million. For commercial complaints relating to buildings cover, the limit is R6.5 million (FAnews, 2017).
Treating Customers Fairly and the Ombudsman (Masthead, n.d.)
The fair treatment of customers, or TCF as it is generally known underpins the General Code of Conduct for financial services providers (FSPs), like Eqstra Financial Services (EFS) and the Representatives working for it to provide customers with a quality, reliable and professional service.
The TCF framework is built on principles that help drive an FSPs business conduct towards a set of six outcomes aptly termed TCF outcomes. An FSP therefore needs to move toward a place where their business practices achieve these outcomes and eventually become an inherent part of all areas within the business.
All FSPs need to demonstrate to regulators that they adhere to the TCF principles and treat their customers fairly. Documenting the implementation of new business processes or the change to existing practices therefore becomes a fundamental part of a businesses’ TCF journey.
The TCF initiative has at its core, six outcomes which function as a guide on how financial service providers can achieve the imperative of treating customers fairly, and we at Eqstra, as your fleet insurance representative fully subscribes to TCF and the fundamental principles that it stand for and wants to achieve.
Outcome 1 requires FSP’s to ensure that the fair treatment of customers is central to
their corporate culture.
Outcome 2 deals with product and service design and their suitability for the target
Outcome 3 requires FSP’s to properly inform customers prior to the purchase and to keep them informed even after the sale.
Outcome 4 requires the FSP to provide advice suitable to the customer and their peculiar circumstances, where advice is required or offered.
Outcome 5 requires the FSP to ensure that their products perform in line with the expectations created and that the services are of an acceptable standard.
Outcome 6 requires the FSP not to create any post-sale barriers to change the product, switch providers, to claim or to complain, when they want to.
Eqstra Financial Services strives to consistently treat our customers fairly and it is at the heart of our business model.
At Eqstra Financial Services we understand that the customer is at the heart of our business and that the fair treatment of customers is essential to our success. We endeavour to consistently deliver fair outcomes to our customer service and product performance and take full responsibility for the conduct of the firm and its staff.
We recognize that our employees, irrespective of their role, are critical to delivering a positive customer experience and ensuring our customers are treated fairly. Our culture and values encourage and support our employees to achieve this.
As a Non-Mandated Intermediary and Binder Holder, we take all regulatory requirements seriously the requirement to treat customers fairly. We expect all staff to apply the principles of TCF consistently throughout the whole organization. Treating Customers Fairly is a lifestyle because we want to and not because it is a legal requirement.
Interesting and frequently asked questions:
Should I complain to the insurance company first?
It is not compulsory for you to complain first to your insurance company before submitting a complaint to OSTI. We do recommend that before submitting a complaint to the OSTI you first try to resolve your issue with your insurer.
We give this advice because –
- It is helpful if the insurer has the chance to investigate any complaint, before the ombudsman steps in so that it can make sure it has made the right decision.
- Many complaints are caused by a misunderstanding, either on your part or on the part of your insurer. These types of complaints can be quickly and easily fixed once the problem is understood.
- When you complain to the insurer, your claim will usually be looked at by a different person at the insurer. This means that you will get a second opinion from the insurer and you may have your issue resolved.
- Even if your issue is not resolved by the insurer, submitting a complaint to the insurer may give you more information about your matter which will assist you in making your complaint to OSTI.
How do I go about complaining to the Insurance Company?
- It is usually best to complain in writing. But if you phone, ask for the name of the person you speak to. Keep a note of this information, with details such as, the date and time of your call and what was said. This may be required at a later stage.
- Remain calm and polite, however emotional, angry or upset you may be. You are more likely to explain your complaint clearly and effectively if you can stay calm.
- Initially attempt contacting the person you originally dealt with. If they cannot help, indicate that the matter will be taken further. Seek details of the name or job title of the person who will be handling your complaint and for details of the Insurer's complaints procedure.
- Attempt taking up the matter with a senior official at the insurer.
- When you write a letter of complaint, set out the facts as clearly as possible.
- Write down the facts in a logical order and stick to what is relevant. Include important details like your claim number or your policy number.
- Keep a copy of any letters between you and the Insurer.
What to do next:
If you are not happy with the Insurer's decision you may:
- Contact the OSTI. They may be able to help. You will need to fill in their complaint form and send it back.
- Issue a summons against the insurance company out of the Small Claims Court (there is a small cost involved). The maximum amount that can be claimed in the Small Claims Court is R 15,000.
- Consult with an attorney to pursue the matter by means of further legal action.
Must my complaint be in writing?
You can complain in writing but the OSTI also provide a telephonic or walk-in service.
How do I complain to the OSTI?
You complain by filling in an application for assistance form and sending it back to OSTI. You can either do this online or by downloading their application form. You can send the filled in application form to:
Fax: 011 726 5501
PO Box: 32334, Braamfontein, 2017
If you need help with filling out the form you can contact OSTI on 011 726 8900 / 0860 726 890. Alternatively, you can go in and see OSTI at 1 Sturdee Avenue, First Floor, Block A, Rosebank, and they will help you complete the application form.
OSTI has trained staff able to assist you in filling out the application form in the following languages: Afrikaans, Xhosa, Zulu, Southern Sotho, Northern Sotho, Tswana, Ndebele, SiSwati and English.
OSTI operating hours are from Monday to Friday at 8am to 4:30pm.
How can the OSTI be impartial to the Insurer when the Insurer pays its fees?
Although the insurer pays a fee for each complaint that is submitted to OSTI, OSTI understands that insurers get their funding from consumers who pay their premiums. OSTI always appreciates that their services are funded both by the consumer and by the insurer. OSTI takes its role as an impartial and independent forum very seriously and deals with each complaint that is lodged with it.
What type of Complaints does the OSTI cover?
OSTI has jurisdiction to deal with any short-term insurance matter where –
- The insurer is a memberof the OSTI;
- The claim is within its monetary jurisdiction,
- And it does not fall under the exclusions as stipulated on the OSTI’s website
Why does an insurer have to comply with the OSTI’s decisions?
Insurers enter into a contractual agreement with OSTI promising to abide by OSTI’s rulings. Eqstra is in full support of the OSTI’s decisions and its outcomes.
(The Ombudsman for Short Term Insurance (OSTI), 2020)