Generally, the FAIS Act’s complaint resolution mechanisms aim at providing speedy and cost-effective measures to save clients having to follow the costly and time consuming route via the courts. This does however not preclude clients from exercising their ultimate rights to seek redress through the courts, as clearly stated in Section 40 of the Act. Obviously, in complicated cases involving large amounts of damages, the latter route will always be preferable.1
In terms of Part XI of the General Code of Conduct, Financial Services Providers are obliged to maintain an internal complaint resolution system and procedure. Notwithstanding that the current wording of Part XI means that the establishment of an internal complaint resolution system corresponding to that prescribed is not obligatory for a Representative, it is a specific requirement for all employees, including Representative’s, of The FSP that they adhere to the requirements of this Manual as well as all the provisions of the Financial Advisory and Intermediary Services Act of 2002 with regard to complaints.
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 –
- 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;
- The insurer or its service provider’s maladministration or wilful or negligent action or failure to act, has caused the person harm, prejudice, distress or substantial inconvenience; or
- The insurer or its service provider has treated the person unfairly;
Rejected Complain: means that a complaint was not upheld – Insurer regards the complaint as finalised after advising the complainant that it does not intend to take any further action to resolve the complaint – Incl. complaints regarded as unjustified or invalid / where the complainant does not accept or respond to proposals to resolve the complaint.
Reportable complaint: any complaint (as per the definition above) unless–
- upheld immediately by the person who initially received the complaint;
- upheld within the insurer’s ordinary processes for handling policyholder queries, provided that such process does not take more than five business days from the date the complaint is received; or
- 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.
Upheld: that a complaint has been finalised wholly or partially in favour of the complainant and –
- the complainant has explicitly accepted that the matter is fully resolved; or
- it is reasonable for the insurer to assume that the complainant has so accepted; and
- all undertakings made by the insurer to resolve the complaint have been met or the complainant has explicitly indicated its satisfaction with any arrangements.
Compensation payment: to compensate a complainant for a proven or estimated financial loss incurred as a result of the insurer’s wrongdoing – insurer accepts liability for having caused the loss concerned – excluding:
- goodwill payment;
- payment contractually due in terms of a policy; or
- refund of an amount which was not contractually due.
Goodwill payment: a payment (monetary or in the form of a benefit or service as an expression of goodwill aimed at resolving a complaint, where the insurer does not accept liability for any financial loss to the complainant.
We must attend to the following;
- Request that the client who has a complaint against either us or our Representative to lodge such complaint in writing although the client may lodge their complaint verbally if they prefer.
- Acknowledge receipt of complaints in writing to a client within 48 hours and provide the client with the following; o the type of information required from a complainant
- where, how and to whom a complaint and related information must be
- expected turnaround times in relation to complaints; and
- any other relevant responsibilities of a complainant
- Handle clients’ complaints in a timely and fair manner, with each complaint receiving proper consideration in a process that is managed appropriately and effectively.
- Inform the client of the outcome of the enquiry within 7 days of receiving the client’s complaint and the client having supplied sufficient details regarding the complaint.
- Advise the client of any further steps, which may be available to the client in terms of the Financial Advisory and Intermediary Services Act, or any other law, where a client’s complaint is not resolved to the client’s satisfaction. Should the outcome of a complaint not be in the client’s favour, full written reasons must be given, and the client must be advised that the complaint may be pursued within 6 months with the Ombud for Financial Services Providers, whose name, address and other contact particulars must simultaneously be provided to the client.
- In any case where a complaint is resolved in favour of a client, 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 an agreed timeframe. .
- Maintain a record of complaints received together with the following information. o all relevant details of the complainant and the subject matter of the complaint;
- copies of all relevant evidence, correspondence and decisions;
- the complaint categorisation as set out in rule 18.5; and
- progress and status of the complaint, including whether such progress is within or outside any set timelines.
- Ensure that all existing and new clients have full and appropriate knowledge of the procedures for the resolution of their complaints. All existing clients are to be made aware of this internal complaint resolution system and procedure manual. The complaints policy shall further be made available on the company website for any potential clients to view.
- Ensure all staff have been trained to manage complaints effectively and fairly.
But always, in any particular case, before the Ombud enjoys jurisdiction, an aggrieved client must first resort to the internal complaint resolution system and procedure.
Resolution of Complaints
The board of directors of the Financial Services Provider must ensure the existence and maintenance of the following:
- Availability of adequate manpower and other resources;
- Adequate training of all relevant staff, including imparting and ensuring full knowledge of the provisions of FAIS, the Policy Protection Rules, TCF, the Rules and the General Code of Conduct with regard to resolution of complaints;
- Ensure that responsibilities and mandates are delegated to facilitate complaints resolution of a routine nature;
- Ensure that there is provision for the escalation of non-routine serious complaints and the handling thereof by staff with adequate expertise;
- Internal follow-up procedures to ensure avoidance of occurrences giving rise to complaints, or to improve services and complaint systems and procedures where necessary.
Specific Obligations 2
- Subject to the other provisions of this section, this internal complaint resolution system and procedure of The FSP, including its Representatives, contain arrangements which
- reduce the details of the internal complaint resolution system and procedure of The FSP, including all subsequent updating or upgrading thereof, to writing;
- provide that access to the procedure is at all times available to clients at any relevant office or branch of The FSP, or by electronic medium, and that such availability is appropriately made known to existing clients;
- make the complaints policy available on the company website for any current or potential client to view;
- include in the details envisaged in para (i) a reference to the duties of The FSP and the rights of the clients;
- include in such detail a clear summary of the provisions of the Act, which will apply whenever the client, after dismissal of a complaint by The FSP, wishes to pursue further proceedings before the Ombud; and
- include in such detail the name, address and other contact particulars of the Ombud; and
- must promptly acknowledge receipt of complaints in writing to a client and provide the client with the following;
- the type of information required from a complainant
- where, how and to whom a complaint and related information must be submitted
- expected turnaround times in relation to complaints; and
- any other relevant responsibilities of a complainant
- must make provision that after the receipt and recording of a particular complaint, the complaint will as soon as practically possible be forwarded to the relevant staff appointed to consider its resolution, and that –
- the complaint receives proper consideration;
- appropriate management controls are available to exercise effective control and supervision of the consideration process;
- inform the client of the outcome of the enquiry within 7 days of receiving the client’s complaint and the client having supplied sufficient details regarding the complaint
- the outcome is not favourable to the client, full written reasons must be furnished to the client, and the client must be advised that the complaint may within 6 months be pursued with the Ombud whose name, address and other contact particulars must simultaneously be provided to the client.
- In any case where a complaint is resolved in favour of a client, The FSP must ensure that a full and appropriate level of redress is offered to the client without any delay.
In all instances where there is a verbal complaint from a client the person receiving the call shall:
- In the first instance transfer the call to a Manager
- Should a Manager not be available then take note of the name and contact detail of the complainant. Inform the client that the complaint will be referred to a Manager as soon as the Manager is available. Inform the client of his or her name and contact detail.
- Immediately after the manager makes contact with the complainant the Manager must then send either a letter or fax or e-mail to the client confirming the discussion.
- In all instances copies of correspondence and other relevant information must be copied to the Administration Manager without delay.
- The Administration Manager must immediately inform the FSP or Representative of the complainant together with the action taken.
Category of persons qualifying as complainants
Complainant” means a person who submits a complaint and includes a
- policyholder or the policyholder’s successor in title;
- beneficiary or the beneficiary’s successor in title
- person whose life is insured under a policy;
- person that pays a premium in respect of a policy;
- member of a group scheme; or
- 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 above.
Where Complainant is not satisfied with the outcome of their complaint, they can may escalate the complaint to the insurer whose contact information may be found on the disclosure document.
If the insurer is still unable to resolve the complaint to the satisfaction of the Complainant, the Short-Term Ombudsman may be contacted.
The Ombudsman for Short Term Insurance
Sunnyside Office Park, 5th Floor, Building D, 32 Princess of Wales Terrace, Park Town, Johannesburg
P.O Box 32334, Braamfontein, 2007
Tel: 011 726 8900 | Fax: 011 726 5501 | Share call: 0860 726 890
1 Financial Advisory and Intermediary Services Manual by Franso Van Zyl published by JUTA
2 Financial Advisory and Intermediary Services Manual, by Franso Van Zyl published by JUTA