Ombudsman for Short-term Insurance (OSTI)

The Ombudsman for Long-term Insurance (OLTI) and the Ombudsman for Short-term Insurance (OSTI) have published their last joint annual report for 2023, as they have now been incorporated into the National Financial Ombud Scheme South Africa (NFO).

From 1 March 2024, the NFO, an industry ombud scheme, commenced operations with the merger of four separate former industry ombud schemes: the Ombudsman for Banking Services South Africa (OBS); the Credit Ombud (CO); OLTI and OSTI.

In June 2021, the World Bank published a report on the role of the financial sector ombud system in South Africa. The report recommended that the overall ombud system and its components be reformed to make it fit-for-purpose and to adequately address the complexity of the South African financial system.

The OBS; CO; OLTI; and OSTI entered into discussions early in 2020 to explore a voluntary amalgamation. The culmination of the work of the four ombud schemes resulted in the OBS, CO, OLTI and OSTI being replaced by the NFO.

Denise Gabriels, Deputy Ombudsman for OLTI, said in the annual report that preparing for the amalgamation was the dominant focus of 2023, alongside fulfilling the primary mission of resolving complaints. She said the amalgamation also marked the end of an era for OLTI which was established in 1985 and has had an illustrious history. Over the last ten years, OLTI placed close to

R2 billion in the hands of complainants.

“The recognition of the NFO Scheme marks a significant shift in the financial ombud landscape; the scheme is the successful outcome of a substantial project to amalgamate four previous industry ombud schemes and to develop the governance model, funding, and a single case management system.

“All complaints received prior to 1 March 2024 will be dealt with by the NFO in accordance with OLTI’s previous rules, and new complaints, as well as any applications for leave to appeal received from 1 March, will be dealt with in terms of the NFO Rules,” said Gabriels.

Edite Teixeira-Mckinon, CEO of OSTI, said having received board and council approvals in 2022, the four ombud schemes began to work on the practical implementation of the NFO, whilst at the same time continuing with their normal work in the current schemes.

“The critical areas of the NFO that the amalgamation project team worked on were a move to a new joint office for the schemes in Johannesburg; governance, including drafting  the NFO Rules, Memorandum of Incorporation, and board charters, and registering the NFO as an NPC; creating an organisational structure for board approval and transferring staff to the NFO; finance and funding; and ICT, including new telephony and case management systems.

“This is my fourth and last report as the CEO of OSTI. This report marks for me the end of a chapter in OSTI’s history and the beginning of a new one filled with exciting opportunities and learnings.

“A strong foundation has been set by the legacy ombud schemes upon which we will build a new consolidated financial ombud scheme that will continue to play its part in enhancing consumer confidence in the financial sector,” said Teixeira-Mckinon.

OLTI and OSTI jointly placed more than R386 million (R386 456 756) in the hands of complainants during the 2023 financial year. OLTI recovered R283 084 553 for complainants in lump sums (an average of R1.14million per working day, considering that there were 248 working days in 2023) and an additional R727 838 was awarded in 169 cases as compensation for poor service. OSTI recorded payment of  R102 644 365 as the monetary benefit and value for consumers who approached the office for assistance.

OLTI received a total of 13 750 written requests for assistance in 2023, of which 6 714 were chargeable complaints, that is, complaints within its jurisdiction. These represent a decline of 16.7% and 5.8% respectively compared to the previous year and indicates a return to pre-COVID-19 levels.  Of the chargeable complaints, 5 506 were Transfers. These are premature complaints, not previously seen by insurers and referred to them to try and resolve directly with complainants. Insurers settled 1 580 of these Transfers directly with complainants. This represents 29% of Transfer complaints, which is a similar percentage to previous years.

Of the 6 342 cases finalised, 3205 Transfers and 3 137 Full cases, 86% were finalised within 6 months of receipt.  26% of the Full cases finalised were resolved either wholly or partially in favour of the complainant. Whilst the number of cases finalised decreased, the number of cases categorised as Complicated increased.  This is indicative of the increased level of complexity of the cases being dealt with and the persistence of complainants.

Complaints about claims being declined accounted for 50.3% of Full complaints finalised, and of the types of policies or benefits complained about, funeral benefits accounted for 44%, while life policies accounted for 34%.

During the year under review, OLTI issued four final rulings against insurers.  In one matter, the Appeal Tribunal overturned the final ruling of the Ombudsman  and found in favour of the complainant.

OSTI ended the 2023 financial year registering 5,6% more new complaints and finalising 1,2% more complaints than in 2022. It ended the year with 12 188 registered complaints, compared to 11 542 in the previous year, and closed 10 534 complaints compared to 10 411 in 2022. Over the last two years, OSTI experienced an increase of around 24% in new registered complaints whilst maintaining the same adjudicative staff complement. The main reason for keeping the staff complement the same was the risk of potential job redundancies going into the amalgamated scheme and the risk that complaint volumes may again decline as had happened in 2021.

By the end of the year, the average turnaround time (TAT) to resolve complaints was 142 days compared to 122 days in 2022. . Without weekends and public holidays, the average TAT for last year was around 97 days.

Of the 12 188 complaints registered, nine complaints related to COVID-19; seven were SASRIA-related complaints arising from the civil unrest in Kwa-Zulu Natal in July 2021; 220 related to power surge; and 167 related to the KwaZulu-Natal floods of April 2022.

Around 40% of all complaints were generated from motor vehicle insurance with the majority of these complaints involving accident-related claims that had been declined on the basis of an exclusion in the policy. The predominant exclusions were a lack of due care or precaution in preventing or minimising the loss, especially in claims involving speeding, followed by misrepresentation or non-disclosure at the time of taking out the policy or during the term of the policy, and at claim’s stage.

The second highest number of complaints, at around 25%, related to homeowners’ claims declined on the basis of policy exclusions. The majority of these claims related to damage caused by acts of nature and declined on the basis of gradual deterioration, lack of maintenance and wear and tear, followed by defects in design or construction.

OSTI recorded a resolved ratio, also known as an overturn ratio, of 16%, a decline of 2% compared to the 18% recorded in 2020, 2021 and 2022. The resolved/overturn ratio is an indicator of those complaints where the insurer’s decision or approach was changed by the office with some additional benefit to the insured.

OSTI issued two final rulings against the same insurer. In both cases, the insurer agreed to abide by the rulings.

OSTI achieved an average overall customer experience rating of 81 out of a target of 80 for 2023. Key performance indicators were derived from call handling, complaints registration and complaints handling statistics and feedback received in the form of surveys completed by complainants and insurers.

In 2023, OSTI moved to a level 1contributor on the B-BBEE qualified small enterprise specialised scorecard.

Teixeira-Mckinon paid tribute to the OSTI Board of Directors for their guidance and support during the year and thanked the staff for their hard work and commitment to ensuring OSTI’s ongoing relevance whilst navigating a year with a lot of change brought on by the integration of OSTI into the NFO.



The National Financial Ombud Scheme South Africa (NFO) is a single, one-stop, all-in-one dispute resolution service made up of four former longstanding industry ombud schemes: the Ombudsman for Long-term Insurance (OLTI), the Ombudsman for Short-term Insurance (OSTI); the Credit Ombud (CO) and Ombudsman for Banking Services (OBS)The NFO’s services are provided free of charge to complainants.

All of the services and assistance involving disputes between long-term/life and short-term/non-life insurers and their customers previously provided by OLTI and OSTI are available for individuals and companies, but now under the NFO umbrella.

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