Claim deadlines for assurers
Nov 15 2009 10:35 Letitia Watson
Cape Town - Financial intermediaries are positive about the proposed changes to the rules protecting long-term policyholders.
These changes include a proposal that a 90-day limit be imposed on life-assurance companies for deciding whether they will reject or contest claims. This will apply to, inter alia, the rules covering claims for death, disability and dreaded-disease benefits.
Gavin Came, chief executive of Sasfin Wealth and director of the Financial Intermediaries Association (FIA), says the proposals are favourable for clients.
"They will curb undue delay in paying out claims. This is particularly important for clients and their families, because such claims are generally lodged during times of stress."
The purpose of the amendments is to ensure that policyholders are advised in good time when a claim is rejected or contested, and to oblige assurers to make quicker decisions. This outcome must be clear within three months.
According to Came, the non-disclosure of certain facts by the insured is one of the main reasons why claims are rejected by long-term assurers.
"If someone, for instance, takes out life insurance knowing full well that he has a dreaded disease like cancer, and fails to disclose that in the application, the insurer can reject the claim if the person dies or is declared incapacitated."
The amendments also propose that policyholders be informed about the assistance available to them for resolving disputes. Policyholders should then have no less than six months after the expiry of the 90-day period following the lodging of a claim to submit their proposals to the assurer.
- Sake24.com |