A raising concern relating to an increase in insurance claim repudiations. File picture.
ACCESS to information can be defined as the right to seek, receive, and impart information held by public bodies. It is an integral part of the fundamental right of freedom of expression, as recognised by Article 19 of the Universal Declaration of Human Rights (1948), which states that the fundamental right of freedom of expression encompasses the freedom to “to seek, receive and impart information and ideas through any media and regardless of frontiers”.
1. Stanley Bezuidenhout from IBF Investigations is a recognised forensic specialist in crash reconstruction and a court expert who has been at the forefront of assisting individuals and entities with accident-related cases for many years. Over the past five years, he has seen a dramatic rise in insurance claim repudiations, where insurers reject claims for several reasons.
Historically, he has advised individuals to seek recourse through the Ombudsman for Short-term Insurance (OSTI), now part of the National Financial Ombud Scheme (NFO). Bezuidenhout realised that clients said their interactions with the ombudsman were of such a nature that they felt the Ombudsman acted as a guardian for the insurance industry rather than as an impartial arbiter.
Bezuidenhout reached out to the Ombudsman’s office with a request for a recorded Zoom interview, intending to provide them with an opportunity to address these concerns and reassure the public. The Ombudsman’s office initially agreed to the interview and asked for proposed dates but eventually they were not prepared to adhere to his request. Instead, they adopted a confrontational stance, refusing to answer his questions and invoking legal representation to discourage further engagement.
Some of the questions included enquiries about the formation, funding, and operational procedures of the Ombudsman for Short-term Insurance (OSTI), as well as their capacity to enforce decisions and manage conflicts between insurers and consumers. Obviously, this information may shed some light on the impartiality of OSTI. The Senior Assistant Ombudsman (Peter Nkuna) declined the interview, stating that the information he sought was already available on their website and in various publications. We found the website informative and of immense value, but the concerns raised by Bezuidenhout are not covered on the web page.
2. Bezuidenhout thereafter submitted a request for information under the Promotion of Access to Information Act (PAIA). He sought statistical data on accident-related claims - specifically, anonymised records that could help determine whether the Ombudsman’s decisions favoured insurers disproportionately. Some information in this regard is available on the website but it is not sufficient to judge the merits of the cases. After the Ombud Office aggressively opposed Bezuidenhout’s request through legal means, he filed a complaint with the Information Regulator. The Information Regulator is an independent body established in terms of Section 39 of the Protection of Personal Information Act 4 of 2013. It is subject only to the law and the Constitution and it is accountable to the National Assembly.
3. The Information Regulator is, among others, empowered to monitor and enforce compliance by public and private bodies with the provisions of the Promotion of Access to Information Act 2 of 2000, and the Protection of Personal Information Act 4 of 2013.
The Information Regulator issued enforcement action to be recommended for consideration by the Enforcement Committee. “Upon receipt of an Enforcement Notice, the head of the NFO is required to submit an Implementation Plan to the Regulator and the complainant, within ten (10) days of receipt of the Enforcement Notice, outlining how the records will be disclosed to the complainant within the prescribed period.”
An Ombudsman is not to be taken lightly as an institution. It is not a nice to have an institution with no consequences. Accountability is monitored not only locally but internationally, the efficient functioning is of importance to the international finance community.
In a report released in 2021, the International Bank for Reconstruction titled “SOUTH AFRICA Financial Ombud System Diagnostic” said: “The technical assistance for this diagnostic has been provided as part of the South Africa Financial Sector Development and Reform Program undertaken by the World Bank Group and funded by the Swiss State Secretariat for Economic Affairs. The objective of the Financial Sector Development and Reform Program is to assist the South African Government in strengthening financial stability and improving financial inclusion through analytical and advisory services.”
4. Key attributes: A number of key common attributes can be distilled from this guidance concerning the overall financial ombud system and individual financial ombud schemes. The different guidance uses varying terminology, but the key attributes are the following:
• Effectiveness: Consistent redress in all appropriate sectors of financial services.
• Independence: Visibly objective, impartial, and unbiased.
• Accessibility: Well known, easy to use, and free for consumers.
• Fairness: Processes and decisions visibly fair and equitable.
• Efficiency: Good quality of service and value for money.
• Openness: Clear and open to scrutiny about its work and the lessons that can be drawn from it.
Issues to consider include the following:
• Does any financial ombud scheme publish a report, at least yearly, providing information about the cases it has managed and the way in which it has overseen them?
• Does any financial ombud scheme publish other information about its work or plans?
• Does any financial ombud scheme provide generic information to assist early resolution of complaints?
• Does any financial ombud scheme’s case-handling system record all the relevant information about each case?
• Is information collected by any financial ombud scheme in dealing with complaints treated as confidential, subject to specified exceptions?
• Does it identify systemic issues, and new/emerging issues, which may require action by regulators?
• In all these, is there consistency across the financial ombud system?
• Does it provide industry-wide information, to reduce complaints and improve market outcomes for consumers.
5. The Ombudsman, in response to questions on these matters from Business Report, said: “This is a matter between the complainant, Mr Stan Bezuidenhout, and the Non-life Insurance Division (previously Ombudsman for Short-Term Insurance) of the National Financial Ombud Scheme (NFO), and the NFO is in the process of considering the Information Regulator’s decision.”
We would like to point out to the NFO that they are not a law unto themselves. They exist to serve the people of this country. The matter cited above is much wider than a mere individual dispute. It covers a much wider and more comprehensive issue.
The principle we try to identify here is whether we have a scenario of the proverbial iceberg. The principles to which the NFO must adhere reach wider than our own country’s borders.
Unesco advocates for access to information as a fundamental freedom and a key pillar in building inclusive knowledge societies. The organisation promotes rights and values outlined in Article 19 of the Universal declaration of Human Rights. Access to information serves as an integral part of freedom of expression and is an important tool for promoting the rule of law, and other rights and building trust.
The media landscape is fast changing but while we are still standing matters such as these must be answered.
* Kruger is an independent analyst
** The views expressed in this column do not necessarily reflect the views of Independent Newspapers.
PERSONAL FINANCE