The Question Is 'Should Insurers Continuously Update Policyholder Records'? Insurance Law Requires the Principles of Administrative Law to Settle Disputes between the Policyholder and the Insurer
24 Pages Posted: 25 Nov 2019
Date Written: October 25, 2019
It is possible to argue that the Financial Advisory Intermediary Services Ombud (hereafter FAIS Ombud) has jurisdiction to consider insurer's decisions not to update their internal administrative systems. The FAIS Ombud may therefore investigate such matters as a complaint as defined in section 1 of the Financial Advisory and Intermediary Services Act 37 of 2002 (hereafter the FAIS Act). On the other hand, upon any failure to investigate such complaints, the complainant may approach the Financial Services Tribunal, either to give directions to the FAIS Ombud regarding how to investigate the complaint or to replace this failure with the Tribunal's own investigation/reconsideration of a decision as regulated in section 8 of the Promotion of Administrative Justice Act 3 of 2000 (hereafter the PAJA). An administrative decision is defined in the Financial Sector Regulation Act 9 of 2017 (hereafter the FSRA) which includes the statutory ombud (example, FAIS Ombud) decisions, such as a decision not to investigate a complaint. When an insurer's decision is in fact an administrative decision, reference should also be made to the FSRA, i.e. an insurer's decision to debar an employee/representative or a decision not to update relevant policyholder records with new information. An insurer's decision not to update policyholder records is not part of this statutory regulation (FSRA) of what constitutes an administrative decision; nevertheless the PAJA could still be relevant to understand when these decisions could be considered a public function. Although the latter falls outside the scope of this article, the National Horse Racing Authority of Southern Africa v Cyril Naidoo 2010 3 SA 182 (N) is briefly discussed in this article with reference to a public function. In this article, the failure of the FAIS Ombud to investigate a policyholder's (hereafter client) complaint (the insurer is unwilling to update client records) is an administrative decision and it is specifically regulated by FSRA. For this reason, the relevance of the Financial Services Tribunal is discussed when the FAIS Ombud directs the complaint (or the client may also refer a matter in specific circumstances, as if the FAIS Ombud fails to investigate the matter within a reasonable time) to the Financial Services Tribunal for a reconsideration of the decision.
Keywords: Financial Services Tribunal, Insurance, FAIS Ombud, OSTI, fraud, public function, policy holder records, reconsideration, insurance law, Financial Sector Regulation Act, duty of disclosure
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