Decrease in Number of Long Term Insurance Complaints

April 23 - In his annual report, Judge Brian Galgut, ombudsman for the long term insurance industry in South Africa, showed that his office received 15% less complaints compared to last year. This translated to a drop from 9234 cases in 2006 to only 7923 cases in 2007.

While there were a number of reasons for this decline in numbers, Galgut outlined some of the main ones, including a positive investment market, his own office's growing influence on the industry and the appointment of internal auditors by some of the top long term insurance companies in the industry.

Galgut showed that the sharpest drop in complaints came regarding investment returns. "Complaints concerning how much money you get when your policy matures, policy performance and the amount of money you get if you cash in your policy ahead of your schedule, have shown the deepest decline," he wrote in his report.

The fact that companies such as Sanlam and Old Mutual had appointed internal auditors to investigate some of the complaints themselves also resulted in a drop in complaints, said Galgut. In addition, the new Financial Advisory and Intermediary Services ombudsman also lifted some of the pressure from his own offices, and offered consumers more options when choosing their route of complaint.

The majority of claims, according to Judge Galgut's report, related to claims being denied by long term insurance companies. While the ombudsman respected the decision in a vast number of cases, the industry still came under criticism for slacking up when it came to paying out claims and a general 'dragging of the feet' by five specific insurance companies out of a total of forty three in the market.

"It is worrying that life insurers in about 492 cases have responded to the office in a tardy or inadequate manner," wrote Galgut.