CR120
Dissatisfaction with policy performance
Background
The complainant approached our office, as he was dissatisfied with the return on his investment. A financial advisor employed by a banking institution originally marketed the product which was underwritten by a long-term subscribing insurer. The 5-year term policy netted premium contributions totaling R446 496-00 and the complainant was offered a return of R361 927-00. According to the complainant, he was allegedly promised a return of R1 000 000-00 by the financial advisor.
A further matter raised by the complainant was that he was not afforded the opportunity to assess the performance of his policy as the insurer neglected to provide him with documentation to highlight the decline in the investment.
He was of the view that, at the least, that he should be compensated for the difference between his total contributions and that, which was already paid to him together with interest.
The insurer was afforded the opportunity to respond to the complainant’s enquiry. The explanation given was that the maturity value of R1 000 000 was illustrative and not guaranteed. The insurer provided a detailed breakdown of the monthly performance of the policy over the full term. Amongst the contributing factors that lead to the low returns, as explained by the insurer, were the collapsing stock markets and the rand dollar exchange at the time.
Assessment
On the face of it, the explanation provided by the insurer appeared reasonable. In order to fully assess the complaint we required an actuarial certificate confirming that the end value was correct; feedback from the insurer as to whether or not the complainant was provided with documentation during the term of the policy; and a copy of the signed proposal form together with a full copy of the policy document. Non of the requirements had been forthcoming.
Recommendation
The complainant was referred to the Ombudsman for Banking Services in view of his allegation against the bank consultant, and the insurer was ordered to pay the complainant an amount of R5 000-00 in view of the inconvenience suffered as a result of the poor service received from them.
Resolved
In a settlement between the insurer and the banking institution, it was agreed to pay the complainant an amount of R429 596-59. In addition to this the bank settled a further amount of R58 412-67 in terms of the poor advice provided by their advisor. At the request of the insurer, we agreed to waive the penalty of R5 000-00.
DCW
October 2005
