Short-Term Insurance Act, 1998 (Act No. 53 of 1998)

Policyholder Protection Rules

Policyholder Protection Rules (Short-Term Insurance), 2017

Chapter 7 : No Unreasonable

Rule 18 : Complaints Management

Purchase

18.1	Definitions

In this rule—

"complainant"

means a person who submits a complaint and includes a—

(a)	policyholder or the policyholder's successor in title;

(b)	beneficiary or the beneficiary's successor in title;

(c)	person whose life is insured under a policy;

(d)	person that pays a premium in respect of a policy;

(e)	member of a group scheme; or

(f)	potential policyholder or potential member of a group scheme whose dissatisfaction relates to the relevant application, approach, solicitation or advertising or marketing material;

who has a direct interest in the agreement, policy or service to which the complaint relates, or a person acting on behalf of a person referred to in paragraphs (a) to (f);

"complaint"

means an expression of dissatisfaction by a person to an insurer or, to the knowledge of the insurer, to the insurer's service provider relating to a policy or service provided or offered by that insurer which indicates or alleges, regardless of whether such an expression of dissatisfaction is submitted together with or in relation to a policyholder query, that—

(a)	the insurer or its service provider has contravened or failed to comply with an agreement, a law, a rule, or a code of conduct which is binding on the insurer or to which it subscribes;

(b)	the insurer or its service provider's maladministration or willful or negligent action or failure to act, has caused the person harm, prejudice, distress or substantial inconvenience; or

(c)	the insurer or its service provider has treated the person unfairly;

"compensation payment"

means a payment whether in monetary form or in the form of a benefit or service, by or on behalf of an insurer to a complainant to compensate the complainant for a proven or estimated financial loss incurred as a result of the insurer's contravention, non-compliance, action, failure to act, or unfair treatment forming the basis of the complaint, where the insurer accepts liability for having caused the loss concerned, but excludes any—

(a)	goodwill payment;

(b)	payment contractually due to the complainant in terms of a policy; or

(c)	refund of an amount paid by or on behalf of the complainant to the insurer where such payment was not contractually due;

and includes any interest on late payment of any amount referred to in paragraphs (b) or (c);

"goodwill payment"

means a payment, whether in monetary form or in the form of a benefit or service, by or on behalf of an insurer to a complainant as an expression of goodwill aimed at resolving a complaint, where the insurer does not accept liability for any financial loss to the complainant as a result of the matter complained about;

"policyholder query"

means a request to the insurer or the insurer's service provider by or on behalf of a policyholder, for information regarding the insurer's policies, services or related processes, or to carry out a transaction or action in relation to any such policy or service;

"rejected"

in relation to a complaint means that a complaint has not been upheld and the insurer regards the complaint as finalised after advising the complainant that it does not intend to take any further action to resolve the complaint and includes complaints regarded by the insurer as unjustified or invalid, or where the complainant does not accept or respond to the insurer's proposals to resolve the complaint;

"reportable complaint"

means any complaint other than a complaint that has been—

(a)	upheld immediately by the person who initially received the complaint;

(b)	upheld within the insurer's ordinary processes for handling policyholder queries in relation to the type of policy or service complained about, provided that such process does not take more than five business days from the date the complaint is received; or

(c)	submitted to or brought to the attention of the insurer in such a manner that the insurer does not have a reasonable opportunity to record such details of the complaint as may be prescribed in relation to reportable complaints; and

"upheld"

means that a complaint has been finalised wholly or partially in favour of the complainant and that—

(a)	the complainant has explicitly accepted that the matter is fully resolved; or

(b)	it is reasonable for the insurer to assume that the complainant has so accepted; and

(c)	all undertakings made by the insurer to resolve the complaint have been met or the complainant has explicitly indicated its satisfaction with any arrangements to ensure such undertakings will be met by the insurer within a time acceptable to the complainant.

18.2	Establishment of complaints management framework

18.2.1

An insurer must establish, maintain and operate an adequate and effective complaints management framework to ensure the fair treatment of complainants that—

(a)	is proportionate to the nature, scale and complexity of the insurer's business and risks;

(b)	is appropriate for the business model, policies, services, policyholders, and beneficiaries of the insurer;

(c)	enables complaints to be considered after taking reasonable steps to gather and investigate all relevant and appropriate information and circumstances, with due regard to the fair treatment of complainants;

(d)	does not impose unreasonable barriers to complainants; and

(e)	must address and provide for, at least, the matters provided for in this rule.

18.2.2

An insurer must regularly review its complaints management framework and document any changes thereto.

18.3	Requirements for complaints management framework

18.3.1

The complaints management framework must at least, provide for—

(a)	relevant objectives, key principles and the proper allocation of responsibilities for dealing with complaints across the business of the insurer;

(b)	appropriate performance standards and remuneration and reward strategies (internally and where any functions are outsourced) for complaints management to ensure objectivity and impartiality;

(c)	documented procedures for the appropriate management and categorisation of complaints, including expected timeframes and the circumstances under which any of the timeframes may be extended;

(d)	documented procedures which clearly define the escalation, decision-making, monitoring and oversight and review processes within the complaints management framework;

(e)	appropriate complaint record keeping, monitoring and analysis of complaints, and reporting (regular and ad hoc) to executive management, the board of directors and any relevant committee of the board on—

(i)	identified risks, trends and actions taken in response thereto; and

(ii)	the effectiveness and outcomes of the complaints management framework;

(f)	appropriate communication with complainants and their authorised representatives on the complaints and the complaints processes and procedures;

(g)	appropriate engagement between the insurer and a relevant ombud;

(h)	meeting requirements for reporting to the Authority and public reporting in accordance with this rule;

(i)	a process for managing complaints relating to the insurer's service providers, insofar as such complaints relate to services provided in connection with the insurer's policies or related services, which process must—

(i)	enable the insurer to reasonably satisfy itself that the service provider has adequate complaints management processes in place to ensure fair treatment of complainants;

(ii)	provide for monitoring and analysis by the insurer of aggregated complaints data in relation to complaints received by the service provider and their outcomes;

(iii)

include effective referral processes between the insurer and the service provider for handling and monitoring complaints that are submitted directly to either of them and require referral to the other for resolution; and

(iv)	include processes to ensure that complainants are appropriately informed of the process being followed and the outcome of the complaint; and

(j)	regular monitoring of the complaints management framework generally.

18.4	Allocation of responsibilities

18.4.1

The board of directors of an insurer is responsible for effective complaints management and must approve and oversee the effectiveness of the implementation of the insurer's complaints management framework.

18.4.2

Any person that is responsible for making decisions or recommendations in respect of complaints generally or a specific complaint must—

(a)	be adequately trained;

(b)	have an appropriate mix of experience, knowledge and skills in complaints handling, fair treatment of customers, the subject matter of the complaints concerned and relevant legal and regulatory matters;

(c)	not be subject to a conflict of interest; and

(d)	be adequately empowered to make impartial decisions or recommendations.

18.5	Categorisation of complaints

18.5.1

An insurer must categorise reportable complaints in accordance with the following minimum categories—

(a)	complaints relating to the design of a policy or related service, including the premiums or other fees or charges related to that policy or service;

(b)	complaints relating to information provided to policyholders;

(c)	complaints relating to advice;

(d)	complaints relating to policy performance;

(e)	complaints relating to service to policyholders, including complaints relating to premium collection or lapsing of policies;

(f)	complaints relating to policy accessibility, changes or switches;

(g)	complaints relating to complaints handling;

(h)	complaints relating to insurance risk claims, including non-payment of claims; and

(i)	other complaints.

18.5.2

An insurer must, in addition to the categorisation set out in rule 18.5.1, consider additional categories relevant to its chosen business model, policies, services and policyholder base that will support the effectiveness of its complaint management framework in managing conduct risks and effecting improved outcomes and processes for its policyholders.

18.5.3

An insurer must categorise, record and report on reportable complaints by identifying the category contemplated in rules 18.5.1 and 18.5.2 t which a complaint most closely relate and group complaints accordingly.

18.6	Complaints escalation and review process

18.6.1

An insurer must establish and maintain an appropriate internal complaints escalation and review process.

18.6.2

Procedures within the complaints escalation and review process should not be overly complicated, or impose unduly burdensome paperwork or other administrative requirements on complainants.

18.6.3

The complaints escalation and review process should—

(a)	follow a balanced approach, bearing in mind the legitimate interests of all parties involved including the fair treatment of complainants;

(b)	provide for internal escalation of complex or unusual complaints at the instance of the initial complaint handler;

(c)	provide for complainants to escalate complaints not resolved to their satisfaction; and

(d)	be allocated to an impartial, senior functionary within the insurer or appointed by the insurer for managing the escalation or review process of the insurer.

18.7	Decisions relating to complaints

18.7.1

Where a complaint is upheld, any commitment by the insurer to make a compensation payment, goodwill payment or to take any other action must be carried out without undue delay and within any agreed timeframes.

18.7.2

Where a complaint is rejected, the complainant must be provided with clear and adequate reasons for the decision and must be informed of any applicable escalation or review processes, including how to use them and any relevant time limits.

18.8	Record keeping, monitoring and analysis of complaints

18.8.1

An insurer must ensure accurate, efficient and secure recording of complaints-related information.

18.8.2

The following must be recorded in respect of each reportable complaint—

(a)	all relevant details of the complainant and the subject matter of the complaint;

(b)	copies of all relevant evidence, correspondence and decisions;

(c)	the complaint categorisation as set out in rule 18.5; and

(d)	progress and status of the complaint, including whether such progress is within or outside any set timelines.

18.8.3

An insurer must maintain the following data in relation to reportable complaints categorised in accordance with rule 18.5 on an ongoing basis—

(a)	number of complaints received;

(b)	number of complaints upheld;

(c)	number of rejected complaints and reasons for the rejection;

(d)	number of complaints escalated by complainants to the internal complaints escalation process;

(e)	number of complaints referred to an ombud and their outcome;

(f)	number and amounts of compensation payments made;

(g)	number and amounts of goodwill payments made; and

(h)	total number of complaints outstanding.

18.8.4

Complaints information recorded in accordance with this rule must be scrutinised and analysed by an insurer on an ongoing basis and utilised to manage conduct risks and effect improved outcomes and processes for its policyholders, and to prevent recurrences of poor outcomes and errors.

18.8.5

An insurer must establish and maintain appropriate processes for reporting of the information in rule 18.8.4 too its board of directors, executive management or relevant committee of the board.

18.9	Communication with complainants

18.9.1

An insurer must ensure that is complaint processes and procedures are transparent, visible and accessible through channels that are appropriate to the insurer's policyholders and beneficiaries.

18.9.2

An insurer may not impose any charge for a complainant to make use of complaint processes and procedures.

18.9.3

All communications with a complainant must be in plain language.

18.9.4

An insurer must, wherever feasible, provide policyholders with a single point of contact for submitting complaints.

18.9.5

An insurer must disclose too a complainant—

(a)	the type of information required from a complainant;

(b)	where, how and to whom a complainant and related information must be submitted;

(c)	expected turnaround times in relation to complaints; and

(d)	any other relevant responsibilities of a complainant.

18.9.6

An insurer must within a reasonable time after receipt of a complaint acknowledge receipt thereof and promptly inform a complainant of the process to be followed in handling the complaint, including—

(a)	contact details of the person or department that will be handling the complaint;

(b)	indicative timelines for addressing the complaint;

(c)	details of the internal complaints escalation and review process if the complainant is not satisfied with the outcome of a complaint; and

(d)	details of escalation of complaints to the office of a relevant ombud where applicable.

18.9.7

Complainants must be kept adequately informed of—

(a)	the progress of their complaint;

(b)	causes of any delay in the finalisation of a complaint and revised timelines; and

(c)	the insurer's decision in response to the complaint.

18.10

Engagement with ombud

18.10.1

An insurer must—

(a)	have appropriate processes in place for engagement with any relevant ombud in relation to its complaints;

(b)	clearly and transparently communicate the availability and contact details of the relevant ombud services to complainants at all relevant stages of the insurance relationship, including at point of sale, in relevant periodic communications, and when a complaint is rejected or a claim is repudiated;

(c)	display and/or make available information regarding the availability and contact details of the relevant ombud services at the premises and/or on the web site of the insurer;

(d)	maintain specific records and carry out specific analysis of complaints referred to them by the ombud and the outcomes of such complaints; and

(e)	monitor determinations, publications and guidance issued by any relevant ombud with a view to identifying failings or risks in their own policies, services or practices.

18.10.2