What does Twin Peaks Mean for the ST Insurance Industry? ISMAIL MOMONIAT DDG: TAX AND FINANCIAL SECTOR POLICY (email: [email protected]) THE INSURANCE CONFERENCE 2012, Sun City. | National Treasury | 12 June 2012. G20 Response to 2008 Financial Crisis.
Most ST insurance companies are not really prepared to incorporate TCF principles in their practices, and are still stuck to a compliance-based approach
ST Insurance industry is behind the curve on its focus on fair treatment of customers.
Dubious industry practices and defaults for example:
only revising motor car value if prompted, compulsory alarm provisions for households etc
principles of proportionality and fairness not applied in many cases, as system is designed to reject claims in total
NT considering comments on health insurance & med schemes demarcation - if insurers want to compete then must do so on same terms as medical schemes – no cherry picking good risks!
NT believes that market conduct supervisors must move swiftly to oblige public disclosure on relevant information, including on claims received, claims rejected for each company.
Supervisors will have the powers to force compliance and higher standards.
We need more simplified products with standard terminology and comparability.
Defaults must be changed to support customers
Ensuring that all players are FIT and PROPER at ALL times
How does the industry become more accessible to the low-income market?
Does the industry have more affordable products for the small businesses?
How can the ST industry commit to tougher Financial Sector Charter targets?
NT does not believe that industry ombud is sufficiently independent in ST Insurance Industry.
Governance and funding over ombud must be free, and SEEN TO BE FREE, from any interference.
NT considering a system of compulsory levies to fund the operation of ombud offices, together with minimum norms and standards.
Appointment and re-appointment processes of ombud must be free from interference.
The number of complaints going to the ombud reflects on the failings of internal complaints procedures of companies.
The ST Industry appears to be stuck in past practices.
Is the industry really open to new challenges & change?
Are ST insurance products appropriate for the needs of township dwellers, funeral needs, younger market?
Are pricing models really free from redlining? Who subsidises who?
Is there sufficient new blood entering the leadership ranks in the insurance industry?
Can we open up a dialogue to reform and modernise the short-term insurance industry?