The life insurance industry's complaint-resolution service is launching more investigations into complaints and settling a higher proportion of those cases in favour of clients, according to the OmbudService for Life & Health Insurance's (OLHI) 2015-16 annual report.
The report shows that for the fiscal year ended this past March 31, OLHI closed 58 investigations, the most in its history. Of those cases, 80% were settled in favour of consumers, up notably from 50% last year and 30% the previous year.
This increase is attributed primarily to new processes that OLHI has implemented for assessing and handling complaints.
"We are always refining our process to ensure all complaints with merit are thoroughly investigated," says Holly Nicholson, executive director of OLHI, in a statement.
In total, OLHI received 2,136 complaints in the 2015-16 fiscal year — a slight decrease from 2,464 in 2014-15. The product category that generated the highest proportion of complaints was disability insurance, comprising 40.2% of complaints, followed by life insurance, at 26.3%. The most common type of complaint relates to claims, accounting for 63.6% of complaints, followed by service, at 16.3%.
OLHI opened 45 new investigations during the fiscal year. Sixty per cent of these cases involved a denied claim, 20% related to marketing and sales, and 15.6% involved service.
Investigations are launched in certain cases in which consumers have gone through their insurance company's internal review process, have a received a final position letter from their insurer, and are dissatisfied with the outcome. The majority of complaints in the industry are settled either by the insurance company directly, or by OLHI before consumers reach the investigation stage.
Of the cases that OLHI settled during the past fiscal year, the majority pertained to retirement products, at 41.4%, followed by disability insurance, at 31%. All of the final recommendations that OLHI made, which are non-binding, were accepted by the insurance companies.
With the new systems and processes that OLHI has in place, the organization plans to collect and analyze more detailed data on the complaints it receives, and as a result, identify trends more quickly.
OLHI also renewed its Framework for Collaboration with its oversight body, the Canadian Council of Insurance Regulators (CCIR) this past fiscal year. This framework establishes guidelines that govern OLHI's operations to ensure it meets its public service mandate. Under the new framework, OLHI will now have independent reviews on a five-year cycle instead of every three years.
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