When will the complaint about my insurance claim be time-barred?
The claim
The insured’s claim for the theft of items from her home was rejected by the insurer on the basis that there were no visible signs of forced entry into or exit from the insured residence. It was a condition for cover, in terms of the policy wording, that the theft of home contents must be accompanied by visible signs of forced entry into or exit from the insured building.
The loss occurred on 29 March 2019 and the claim was rejected on 12 April 2019.
The insured submitted a complaint regarding the claim to OSTI on 14 March 2022.
The insurer’s defense
In response to the insured’s complaint, the insurer submitted that the insured’s complaint was time-barred and fell outside OSTI’s jurisdiction.
The insured’s policy contained the following time limits:
IF YOUR CLAIM IS REJECTED
6.15 We may accept or reject all or part of your claim, you have 90 days after receiving our rejection letter to object to our decision.
You may email us at the email address shown in the Disclosure Notice giving reasons for your objection. (See document attached to your Policy Schedule called ‘Notice in terms of the Financial Advisory and Intermediary Services (FAIS) Act 37 of 2002’).
6.16 IMPORTANT: If your objection is unsuccessful, you have 6 months from the end of the 90-day period to serve a summons on the Insurer. If you do not do so in this time, we will have no obligations to you under this policy.
CONTACTING THE OMBUDSMAN
6.17 The Insurer gives compensation for all valid claims under the policy honestly, fairly and promptly. If you believe that we have not done so, and you wish to lodge a formal complaint, Please do so via the contact details listed in the Disclosure Notice (See document attached to your Policy Schedule called ‘Notice in terms of the Financial Advisory and Intermediary Services (FAIS) Act 37 of 2002’).
6.18 If you are still not satisfied, you have the right to contact the Ombudsman for Short Term Insurance. The contact details can be found in the Disclosure Notice (See document attached to your Policy Schedule called ‘Notice in terms of the Financial Advisory and Intermediary Services (FAIS) Act 37 of 2002’).
6.19 You have our assurance that we will abide by any decision made by the Ombudsman.
OSTI’s findings
OSTI’s Terms of Reference contain the following provisions:
4. The Jurisdiction of the Ombudsman
4.1 The Ombudsman shall only consider a complaint made to him if he is satisfied that:
4.1.7 the complaint has not become prescribed in terms of the Prescription Act, 1969 or any enforceable time bar provisions contained in the Policy, provided that in relation to any enforceable time-bar provisions in the policy
4.1.7.1 the Ombudsman shall have the power to condone non-compliance therewith upon good cause shown, and
4.1.7.2 the provisions of any enactment which provides for the extension of any period contained in such time-bar provision shall be given effect to.
OSTI looked at Rule 17.6 of the Policyholder Protection Rules which deals with time limitation provisions for the institution of legal action against insurers if a claim is rejected or the quantum of a claim is disputed. OSTI found that the time-barring clause relied on by the insurer was valid and that the insurer complied with its obligations in terms of the Policyholder Protection Rules.
The time-barring provisions appeared in the policy documents sent to the insured as well as the rejection letter. The insured was aware of the time limits and failed to provide any reasonable explanation for the delay in submitting a complaint to OSTI. Accordingly, the late filing of the complaint to OSTI could not be condoned.
OSTI found that the matter was time-barred and consequently fell outside of OSTI’s jurisdiction.
