Deanne Wood OSTI Presentation to the Select Committee on Finance National Council of Provinces (NCOP) 14 February 2017

Points of address Mission Statement and Values Introduction Jurisdiction Governance Structure Statistics Complaint Trends Main operational areas of concern for OSTI

Mission Statement and Values To resolve your short-term insurance complaints fairly, efficiently and impartially Established in August 1989 OSTI provides consumers with a free, efficient and fair dispute resolution mechanism. It offers consumers a “no risk” mechanism to resolve disputes with insurers

Introduction Recognised under the Financial Services Ombud Schemes Act.  OSTI is an independent office funded directly by insurers and indirectly by consumers (through payment of premiums). OSTI acts independently and objectively in resolving disputes and is not under instructions from anybody when exercising its authority. Insurers, who are members of OSTI, have agreed to abide by the Ombudsman’s decision. But decisions are not binding on complainants.

Introduction cont … Insurers and complainants may appeal to internal Appeal Tribunal OSTI acts as a “mediator” or informal arbitrator. OSTI does not represent either of the parties to the dispute. OSTI’s decisions can be based on law and equity OSTI does not give legal advice

Jurisdiction The Office can assist consumers with the following personal lines short-term insurance for claims under R2million including: Motor Homeowners (Buildings) – here the jurisdictional limit is R4million Household (Contents) Cell phone Travel Disability Credit protection insurance OSTI has limited jurisdiction over Commercial Insurance (businesses with a turnover in the last financial year of less than R25 million).

Governance structure OSTI’s Terms of Reference define the powers and duties of the Ombudsman. http://www.osti.co.za/terms-of-reference-and-equity.html OSTI’s board comprises four consumer representatives, three insurer representatives, one representative from the South African Insurance Association (a trade association, which represents all short-term insurance companies in South Africa), two independent directors, and one representative from the Financial Services Board. http://www.osti.co.za/our-board-directors.html

Summary of Statistics - 2016 Complaints received 14 917 Complaints opened 10 175 Complaints closed 8 631 Average Turnaround time 91 days Value to consumers R90million Calls received by call centre 71 000

REGISTERED CASES PER CLAIM TYPE Complaint Trends REGISTERED CASES PER CLAIM TYPE Motor 4 991 Homeowners 2 128 Other 1 308 Commercial 734 Household Contents 711 Non claim related 303

Main operational areas of concern for OSTI Consumer education and awareness: OSTI endeavours to educate consumers Systemic issues within industry Free service offered by OSTI Resources are limited

Main operational areas of concern for OSTI cont… High number of complaints submitted vs number of staff employed to deal with complaints: Approximately 1000 new complaints registered per month Assistant ombudsmen resolve around 100 complaints per month NPO – limited funds for employing additional staff Persistent challenge to find the balance between resolving matters efficiently and resolving them competently

Thank you