JENNIFER PREISS

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JENNIFER PREISS SUE MYRDAL
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IS IT FAIR/UNFAIR?

• Senior citizen served a cup of hot coffee at the
  drive-through
• Opened the cup in her car and spilled it on her
  lap
• Jury McDonalds negligent awarded her 3 million
  dollars

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IS IT STILL FAIR/UNFAIR?

• The coffee is so hot (1900 F.) that it caused
  third degree burns to thighs/genitals
• McDonalds had 700 complaints the year before
  that the coffee was too hot warned several times
  to cool it by the authorities
• McDonalds admitted that the coffee was not fit
  for human consumption at that temperature
• The woman offered to settle for just her medical
  bills (2 000) but McDonalds refused

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IS IT STILL FAIR/UNFAIR?

• Coffee must be served (not consumed) at that
  temperature for optimum aroma and flavour
• Nobody wants take-away coffee cold
• McDonalds sold several billion cups of coffee per
  year
• People know that hot coffee is dangerous they
  should blow on it or hold it away from selves

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MISSION
TO RECEIVE AND CONSIDER COMPLAINTS AGAINST
SUBSCRIBING INSURERS AND TO RESOLVE SUCH
COMPLAINTS THROUGH MEDIATION, CONCILIATION,
RECOMMENDATION OR DETERMINATION
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FEATURES OF THE OMBUDSMAN SCHEME

• Independence
• Accountability
• Ready, free access for complainants
• Procedural informality

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FEATURES OF THE OMBUDSMAN SCHEME (cont.)

• Resolution via mediation, conciliation
• Cost effectiveness
• Procedural fairness
• Binding decisions in respect of subscribers

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FEATURES OF THE OMBUDSMAN SCHEME (cont.)

• Retention of Complainants right of access to
  courts
• Prescription halted during process
• Internal appeal procedure
• Equity jurisdiction
• Voluntary scheme

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WHO CAN COMPLAIN TO US?

• ANY POLICYHOLDER
• SUCCESSOR IN TITLE
• BENEFICIARY
• PREMIUM PAYER
• INSURED LIFE
• WHO HAS A COMPLAINT ABOUT A LIFE INSURANCE POLICY
  AGAINST A SUBSCRIBING INSURER

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HOW THE OFFICE WORKS

• Not a court
• In considering a complaint we take into account
• Probabilities (standard is balance of
  probabilities)
• Onus of proof
• Legal principles
• Considerations of equity/fair play
• If not possible to resolve a dispute of fact and
  both parties agree, an informal hearing may be
  held

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HOW THE OFFICE WORKS (cont.)

• We seek outside expert advice when necessary
• We often try to settle a matter
• We give a preliminary ruling first both parties
  have further chance to argue
• Thereafter a final ruling is made

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HOW THE OFFICE WORKS (cont.)

• Once a ruling is final the unsuccessful party may
  apply for leave to appeal to an appeal tribunal
• We can award compensation
• We report systemic issues to the industry and FSB

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WHAT WE EXPECT FROM INSURERS

• Responses within time frames
• Full information in response to complaints
• Co-operation in resolving the dispute
  willingness to consider possible settlement
• Feedback if there is a problem
• Documentation attached see checklist

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WHAT WE EXPECT FROM INSURERS
Refer to our website www.ombud.co.za Home Offic
e Personnel What we do Topics and Cases How to
complain Papers and Presentations Rules Process
Audit Common problems Practice notes Annual
Reports News Information Brochures Code of
Ethics Helpful links Newsletters
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(No Transcript)
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SUMMARY OF CASES FINALISED
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CASES FINALISED WHOLLY OR PARTIALY IN FAVOUR OF
THE COMPLAINANT
44 of cases are resolved in favour of
complainants
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SOME CLAIMS ISSUES

• DEFENCES
• EXCLUSION CLAUSES
• WHAT IS AN EXCLUSION CLAUSE EXAMPLES
• ONUS OF PROOF
• QUALITY OF EVIDENCE
• BALANCE OF PROBABILITIES

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SOME CLAIMS ISSUES

• WAITING PERIODS
• TIME BARRING PROVISION
• i.e. TIME WITHIN WHICH TO CLAIM
• INSURABLE INTEREST
• FRAUD
• FULL INFORMATION OF SUSPECTED UNLAWFUL CONDUCT
• GROUNDS FOR SUSPICION
• WHY DISCLOSURE WOULD BE PREJUDICIAL

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TRENDS / PROBLEMS IN CLAIMS
DEATH CLAIMS HIV/AIDS EXCLUSIONS
DECLINING DISABILITY PSYCHIATRIC CLAIMS INCOME
DISABILITY DEFINITION OF INCOME DREAD DISEASE /
CRITICAL ILLNESS DRAFTING INTERPRETATION
PROBLEMS
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NON-DISCLOSURE
Long-term Insurance Act of 1998 Section 59 (1)
(a) The obligations of the insurer shall not be
excluded or limited on account of any failure to
disclose information unless that representation
or non-disclosure is such as to be likely to have
materially affected the assessment of the risk
under the policy concerned at the time of its
issue.
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NON-DISCLOSURE
Section 59 (1) (b) sets out the test as to
whether non-disclosed information was material or
not The representation or non-disclosure shall
be regarded as material if a reasonable, prudent
person would consider that the particular
information constituting the representation or
which was not disclosed, as the case may be,
should have been correctly disclosed to the
insurer so that the insurer could form its own
view as to the effect of such information on the
assessment of the relevant risk.
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NON-DISCLOSURE

• The reasonable prudent person in our view is
• neither the actual applicant for insurance
• nor the actual insurer
• but a hypothetical person standing in the shoes
  of the applicant, with the knowledge and
  appreciation that a lay person would possess of
  the factors an insurer would take into account in
  assessing the risk.

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NON-DISCLOSURE

• SOME ISSUES
• PARTIAL RESCISSION
• FORFEITURE OF PREMIUMS
• RECONSTRUCTING THE CONTRACT

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NON-DISCLOSURE
UK FINANCIAL OMBUDSMAN SERVICE GUIDELINES INSURE
RS SHOULD ASK QUESTIONS REMEDY DEPENDS ON
FAULT WHAT WOULD THE INSURER HAVE DONE IF IT
HAD BEEN TOLD THE TRUTH? CUT-OFF
PERIOD? INTERMEDIARY DEEMED TO BE INSURERS
AGENT UNLESS THE CONTRARY CLEAR