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Insurance Ombudsman

When policies don’t live up to their promises and when insurance companies take your premiums but reject your claims, who do you call? – the Ombudsman!

The word originates from the old Swedish word meaning representative and, as your representative he provides a free, informal conduit for resolving disagreements between policy holders and insurance companies.

The first Ombudsman in South Africa was a retired judge who was appointed in 1985 to arbitrate between clients and the large insurance corporations. His authority was limited to representing the policy holders’ interests and making recommendations.

Today any ruling which is made by the Ombudsman is binding on the insurer. However, the policy holder who brought the complaint is free to take his case to court if he disagrees with the ruling. So, is the Ombudsman our friend?

Friend or foe?

There is no doubt that the Ombudsman fulfils an important function in mediating between dissatisfied policy holders and their insurance providers. This is particularly so as, for most South Africans, making use of the legal system to settle disputes is expensive, stressful and drawn out.

The Ombudsman will consider any complaint brought before him as long as it is reasonable, within the stipulated time constraints, and made by the policy holder or his authorized representative.

Generally the Ombudsman doesn’t deal with claims above the amount of R800 000. He is also not required to mediate if the claim has already been legally dealt with or if he decides it would be more appropriate to do so in a court of law.

Any time constraints written into the policy are in abeyance while the matter is being investigated and if the policy holder decides to terminate the investigation and seek legal advice, (or if the Ombudsman rules against him) he has at least 30 days to take the matter further.

It is important to remember, however, that the insurance industry voluntarily accepts the Ombudsman’s authority in dispute resolution. It is also important to realize that, until 1999 the Ombudsman’s Committee, which consisted of members of the insurance industry, administered the office of Ombudsman and, even today, although there is an independent Council, the chairperson of the Committee is an ex officio member of the Council.

While acknowledging the industry’s willingness to comply with the rulings of the Ombudsman it is a bit disconcerting to learn the extent of its input in the office.


Although a great many disputes have been resolved in the policy holders’ favour, not everyone is completely happy with the way in which their complaints have been handled.

A number of complainants have reported receiving similarly worded exhortations to be “moderately robust” in the way they deal with problems and to “bear the ordinary and normal degree of inconvenience associated with correcting an unexpected problem,” and a Dial Direct customer, who has waited 8 months for a ruling from the Ombudsman feels strongly that “the Ombudsman is there for the Insurer and not the client.”