South African insurers must take cognisance of the importance of Treating Customers Fairly and the handling of complaints. Lloyds Banking Group has been fined £117 million in the UK for failing to fairly handle payment protection insurance (PPI) complaints.
From March 2012 to May 2013 Lloyds Banking assessed customer complaints relating to 2.3 million PPI policies and rejected 37% of those complaints wrongly.
South African insurers must make sure that they handle customer complaints fairly and that their staff is adequately trained on all aspects of the product from the sales process, benefits and all terms and conditions relating to the product.
Lloyds Banking Group issued a guidance note to its complaint handlers that the principle when assessing complaints was that they were to assume the PPI sales process “was compliant and robust unless told otherwise”.
This principle resulted in many complaints being dismissed.
A company’s complaints process in terms of TCF requires that the complaints themselves must be treated fairly. The culture of the financial institution must foster this philosophy.