| 17.1.1 | For purposes of this rule, reference to a "policyholder" includes a member of a group scheme.”; |
[Rule 17(17.1)(17.1.1) substituted by rule 9(a) of Notice No. 996, GG 41928, dated 28 September 2018];
"business day"
means any day excluding a Saturday, Sunday or public holiday;
"repudiate"
in relation to a claim means any action by which an insurer rejects or refuses to pay a claim or any part of a claim, for any reason, and includes instances where a claimant lodges a claim—
| (a) | in respect of a loss event or risk not covered by a policy; and |
| (b) | in respect of a loss event or risk covered by a policy, but the premium or premiums payable in respect of that policy are not paid. |
| 17.1.2 | [Rule 17(17.1)(17.1.2) deleted by rule 9(b) of Notice No. 996, GG 41928, dated 28 September 2018]; |
| 17.2 | Establishment of claims management framework |
| 17.2.1 | An insurer must establish, maintain and operate an adequate and effective claims management framework to ensure the fair treatment of policyholders and claimants that— |
| (a) | is proportionate to the nature, scale and complexity of the insurer's business and risks; |
| (b) | is appropriate for the business model, policies, services, and policyholders and beneficiaries of the insurer; |
| (c) | enables claims to be assessed after taking reasonable steps to gather and investigate all relevant and appropriate information and circumstances, with due regard to the fair treatment of claimants; |
| (d) | does not impose unreasonable barriers to claimants; and |
| (e) | address and provide for, at least, the matters provided for in this rule. |
| 17.2.2 | An insurer must regularly review its claims management framework and document any changes thereto. |
| 17.3 | Requirements for claims management framework |
| 17.3.1 | The claims management framework must, at least, provide for— |
| (a) | relevant objectives, key principles and the proper allocation of responsibilities for dealing with claims across the business of the insurer; |
| (b) | appropriate performance standards and remuneration and reward strategies (internally and where any functions are outsourced) for claims management in general and specifically for claims assessment to— |
| (i) | prevent conflicts of interest and the incentivisation of behaviour which could threaten the fair treatment of policyholders or claimants; and |
| (ii) | ensure objectivity and impartiality; |
| (c) | documented procedures for the appropriate management of the claims process from the time the claim is received until it is finalised, including the expected timeframes for each of the stages and the circumstances under which any of the timeframes may be extended; |
| (d) | documented procedures setting out the circumstances in which interest will be payable in the event of late payment of claims, the process to be followed in such an instance and the rate of the interest payable; |
| (e) | documented procedures which clearly define the escalation and decision-making, monitoring and oversight and review processes within the claims management framework; |
| (f) | appropriate claims record keeping, monitoring and analysis of claims, and reporting (regular and ad hoc) to the executive management, the board of directors and any relevant committee of the board on— |
| (i) | identified risks, trends and actions taken in response thereto; and |
| (ii) | the effectiveness and outcomes of the claims management framework; |
| (g) | appropriate communication with claimants and their authorised representatives on the claims processes and procedures; |
| (h) | meeting requirements for reporting to the Authority and public reporting in accordance with this rule; and |
| (i) | the establishment of a compliance programme for combating fraud and money laundering appropriate to the insurer's exposure and vulnerabilities, which programme must be consistent with the relevant risk management policies of the insurer. |
| 17.4 | Allocation of responsibilities |
| 17.4.1 | The board of directors of an insurer is responsible for effective claims management and must approve and oversee the effectiveness of the implementation of the insurer's claims management framework. |
| 17.4.2 | Any person that is responsible for making decisions or recommendations in respect of claims generally or a specific claim must— |
| (a) | be adequately trained; |
| (b) | be experienced in claims handling and be appropriately qualified; |
| (c) | not be subject to a conflict of interest; and |
| (d) | be adequately empowered to make impartial decisions or recommendations. |
| 17.4.3 | A claim received by an independent intermediary, binder holder or any other service provider that has been mandated by the insurer to manage claims on its behalf, or a claim received by a representative of the insurer, is deemed to have been received by the insurer itself. |
| 17.4.4 | The outsourcing of the claims management process or any part thereof to an intermediary, a binder holder or any other person, or any other involvement of an intermediary, binder holder or other person, in the claims management process does not in any way diminish the insurer's responsibilities in terms of this rule. |
| 17.5 | Claim escalation and review process |
| 17.5.1 | An insurer must establish and maintain an appropriate internal process in terms of which claims decisions can be escalated and/or reviewed and claims related disputes can be resolved. |
| 17.5.2 | Procedures within the claims escalation or review process should not be overly complicated, or impose unduly burdensome paperwork or other administrative requirements on claimants. |
| 17.5.3 | The escalation or review process should— |
| (a) | follow a balanced approach, bearing in mind the legitimate interests of all parties involved including the fair treatment of claimants; |
| (b) | provide for internal escalation of complex or unusual claims at the instance of the initial claim handler; |
| (c) | provide for claimants to escalate claims not resolved to their satisfaction; and |
| (d) | be allocated to an impartial, senior functionary within the insurer or appointed by the insurer for managing the claims escalation or review process of the insurer. |
| 17.5.4 | An insurer may structure its claims escalation and review process as a component of the complaints escalation and review process required by rule 18.6, provided such process complies with all relevant provisions of this rule insofar as it applies to claims-related complaints. |
| 17.6 | Decisions relating to claims and time limitation provisions for the institution of legal action |
| 17.6.1 | An insurer must accept, repudiate or dispute a claim or the quantum of a claim for a benefit under a policy within a reasonable period after receipt of a claim. |
| 17.6.2 | An insurer must within 10 days of taking any decision referred to in rule 17.6.1, notify the claimant in writing of its decision. |
| 17.6.3 | If the insurer repudiates or disputes a claim or the quantum of a claim, the notice referred to in rule 17.6.2 must, in plain language, inform the claimant— |
| (a) | of the reasons for the decision, in sufficient detail to enable the claimant to dispute such reasons if the claimant so chooses; |
| (b) | that the claimant may within a period of not less than 90 days after the date of receipt of the notice make representations to the relevant insurer in respect of the decision; |
| (c) | of details of the internal claim escalation and review process required by rule 17.5; |
| (d) | of the right to lodge a complaint to a relevant ombud and the relevant contact details and time limitation and other relevant legislative provisions relating to the lodging of such a complaint; |
| (e) | in the event that the relevant policy contains a time limitation provision for the institution of legal action, of that provision and the implications of that provision for the claimant; and |
| (f) | in the event that the relevant policy does not contain a time limitation provision for the institution of legal action, of the prescription period that will apply in terms of the Prescription Act, 1969 (Act No. 68 of 1969) and the implications of that Act for the claimant. |
| 17.6.4 | If a claim or quantum of a claim is repudiated or disputed as contemplated in rule 17.6.1 on behalf of an insurer by a person other than the insurer, such other person must provide the notice contemplated in rule 17.6.2 and include in that notice, in addition to the information referred to in rule 17.6.3, the name and contact details of the insurer and a statement that any recourse or inquiries must be directed directly to that insurer. |
| 17.6.5 | If the claimant makes representations to the relevant insurer in accordance with the internal claim escalation and review process referred to in rule 17.5 the insurer must within 45 days of receipt of the representation, in writing, notify the claimant of its decision to accept, repudiate or dispute the claim or the quantum of the claim. |
| 17.6.6 | If the insurer, despite the representations of the claimant, confirms the decision to repudiate or dispute the claim or the quantum of the claim, the notice referred to in rule 17.6.5 must— |
| (a) | inform the claimant of the reasons for the decision in sufficient detail to enable the claimant to dispute such reasons if the claimant so choose; |
| (b) | include the facts that informed the decision; and |
| (c) | include the information referred to in rules 17.6.3(c) to (f). |
| 17.6.7 | Any time limitation provision for the institution of legal action that may be provided for in a policy entered into before 1 January 2011 may not include the period referred to in rule 17.6.3(b) in the calculation of the time limitation period. |
| 17.6.8 | Any time limitation provision for the institution of legal action that may be provided for in a policy entered into on or after 1 January 2011— |
| (a) | may not include the period referred to in rule 17.6.3(b) in the calculation of the time limitation period; and |
| (b) | must provide for a period of not less than 6 months after the expiry of the period referred to in rule 17.6.3(b) for the institution of legal action. |
| 17.6.9 | Despite the expiry of the period allowed for the institution of legal action in a time limitation clause provided for in a policy entered into before or after 1 January 2011, a claimant may request the court to condone non-compliance with the clause if the court is satisfied, among other things, that good cause exists for the failure to institute legal proceedings and that the clause is unfair to the claimant. |
| 17.6.10 | For the purposes of section 12(1) of the Prescription Act, 1969 (Act No. 68 of 1969) a debt is due after the expiry of the period referred to in rule 17.6.3(b). |
| 17.7 | Record keeping, monitoring and analysis |
| 17.7.1 | An insurer must ensure accurate, efficient and secure recording of all claims received, irrespective of whether the claims are valid or not. |
| 17.7.2 | The following must be recorded in respect of each claim received— |
| (a) | all relevant details of the claimant and the subject matter of the claim; |
| (b) | copies of all relevant evidence, correspondence and decisions; and |
| (c) | progress and status of the claim, including whether such progress is within or outside any set timelines. |
| 17.7.3 | An insurer must maintain the following claims related data on an ongoing basis— |
| (a) | number and quantum of claims received; |
| (b) | number and quantum of claims paid; |
| (c) | number and quantum of repudiated claims and reasons for repudiation; |
| (d) | number of claims escalated by claimants to the internal claims escalation and review process and their outcome, which data must also be included in the records and reports required by rule 18 in relation to the category of complaints referred to in rule 18.5.1(h); |
| (e) | number of claims referred to an ombud and their outcome, which data must also be included in the records and reports required by rule 18.8.3(e); and |
| (f) | total number of claims outstanding. |
| 17.7.4 | Claims information recorded in accordance with this rule must be scrutinised and analysed by an insurer on an ongoing basis and utilised to manage conduct risks and effect improved outcomes and processes for its policyholders, and to prevent recurrences of poor outcomes and errors. |
| 17.7.5 | An insurer must establish and maintain appropriate processes for reporting of the information in rule 17.7.3 to its board of directors, executive management or relevant committees of the board. |
| 17.8 | Communications with claimants |
| 17.8.1 | An insurer must ensure that its claims processes and procedures are transparent, visible and accessible through channels that are appropriate to the insurer's policyholders and claimants. |
| 17.8.2 | All communications with a claimant must be in plain language. |
| 17.8.3 | An insurer must disclose to the claimant— |
| (a) | the type of information required from the claimant; |
| (b) | where, how and to whom a claim and related information must be submitted; |
| (c) | any time limits on submitting claims; |
| (d) | any excesses payable by the claimant; |
| (e) | details of any administrative fee payable in relation to management of the claim; and |
| (f) | any other relevant responsibilities of the claimant. |
| 17.8.4 | A claim is deemed to have been received on the day the insurer or its representative or an independent intermediary, binder holder or any other service provider that has been mandated by the insurer to manage claims on its behalf, receives notification thereof and an insurer or such independent intermediary, binder holder, service provider or representative must within a reasonable time after receipt of a claim acknowledge receipt thereof and inform a claimant of the process to be followed in processing the claim, including— |
| (a) | contact details of the person or department that will be processing the claim; |
| (b) | indicative timelines for finalising the claim; and |
| (c) | details of any outstanding requirements. |
| 17.8.5 | An insurer must only require from a claimant information or documentation which is essential to the assessment of the claim. |
| 17.8.6 | Claimants must be kept adequately informed of— |
| (a) | the progress of their claim; |
| (b) | causes of any delay in the finalisation of a claim and revised timelines; and |
| (c) | the insurer's decision in response to the claim. |
| 17.8.7 | An insurer must record a claim by no later than the first business day after the date that the initial claim is received and may not delay recording the claim until such time as all requirements relating to the claim have been received. |
| 17.8.8 | When an insurer makes a final payment or offer of settlement to a claimant, the insurer must explain to the claimant what the payment or settlement is for and the basis used for the payment or settlement. |
| 17.8.9 | Where the claimant is a member of a group scheme or a beneficiary, referred to in paragraph (b) of the definition of "beneficiary", the insurer must on receipt of the claim either— |
| (a) | obtain the contact details of the claimant to enable all communications required by this rule to take place directly with the claimant; or |
| (b) | obtain consent from the claimant that communications required by this rule may take place through the policyholder concerned. |
| 17.9 | Reporting of claims information |
An insurer must have appropriate processes in place to ensure compliance with any prescribed requirements for reporting claims information to any relevant designated authority or to the public as may be required by the Authority.
| 17.10.1 | Where any excess is payable by the policyholder, the excess— |
| (a) | must be clearly disclosed to the policyholder as required by rules 11.4.2(d)(iii) and 11.5.1(c)(iii); |
| (b) | must be disclosed to the claimant as required by rule 17.8.3; |
| (c) | must be fair and reasonable; and |
| (d) | may not constitute an unreasonable barrier to a claimant, taking into account the reasonably assumed circumstances and expectations of the average targeted policyholder and claimant in respect of the policy concerned. |
| 17.11 | Prohibited claims practices |
| 17.11.1 | An insurer may not— |
| (a) | dissuade a claimant from obtaining the services of an attorney or adjustor; |
| (b) | deny a claim without performing a reasonable investigation; or |
| (c) | deny a claim based solely on the outcome of a polygraph, lie detector, truth verification or similar test or procedure referred to in rule 7.1(a). |
17.12 Claims received during periods of grace
| 17.12.1 | If a claimant submits a valid claim in respect of an event that occurred during the period referred to in rule 15, the value of the claim may be reduced by the sum of the unpaid premium. |
[Rule 17(17.12)(17.12.1) inserted by rule 9(c) of Notice No. 996, GG 41928, dated 28 September 2018];
