2018 Have seen many changes in the financial service industry. One of the big changes was the implementation of the new Policy Holder Protection Rules (PPR). The PPR will have significant impact on how group scheme policies is managed and insured.
Minimum underwriting requirement for policies is the policyholder’s name, identity number and their contact details, which should include address and cell phone numbers of the policy holder.
The information must be updated on the Insurer’s systems for their monthly reporting to the Financial Services Conduct Authority (FSCA).
This confidential and personal information is subjected to the Protection of Personal Information Act (POPIA). The Insurer, their brokers and administrators should have effective data protection procedures, rules and software in place.
POPIA also protects the consumer and the scheme. The Insurer may not use the data for any other purpose than agreed to between the parties, or required in terms of Legislation. The data may not be used to canvas clients on other product offerings.
Management of claims
The Insurer must ensure that they have effective claims management frame work in place. The main focus must be the continuous fair treatment of policyholders and claimants.
The Insurer must notify the claimant within 10 days of its decision to reject a claim. If the claimant disputes the repudiation of the claim, the Insurer has 45 days to review the claim and additional information submitted by the claimant.
It’s all about TCF
With the various changes it is clear that the FSCA wants the Insurer to place the policyholder at the heart of its business. Insurers need to ensure that the policy meets the promised outcomes and service the policyholder is paying for.
The cost of compliance
The new PPR’s will have a heavy administrative burden on the Insurers. Many Insurers will rely more on administrators to help ease the burden and assist with the data compliance and management. The changes will result in a higher administrative cost included in the risk premium of the policy holder.
This being said, the policy holder can be assured that although the premium may increase, there is better protection on the desired policy outcome. The new rules will make it difficult for noncompliant industry players to stay in the industry.