Written by Yusto Habiye, Consultant
Section 122 (1) of The insurance act of 2009, establishes the insurance ombudsman service as a body responsible for resolving disputes arising between insurance consumers (these are policyholders, third-party claimants, administrators of the deceased’s estates, and successors in title or beneficiaries) and insurance registrants’ (who are persons registered to conduct insurance business other than brokers and agents in Tanzania); it goes therefore that the insurance ombudsman service works by accepting, admitting and administering viable insurance complaints lodged with them, conduct investigations over the claims, advise complainants and insurance registrants, determine complaints and make awards to successful complaints. The insurance ombudsman service consists of an ombudsman, mediators, arbitrators, and supporting personnel.
The insurance ombudsman services were for the first time established in Tanzania in September 2014, when the then minister for finance Ms. Saada Mkuya Salum appointed Honourable Vicent K.D Lyimo a retired high court judge, and the office of ombudsman was officially opened in February 2015. The office of the Insurance Ombudsman was first located In the Tanzania Insurance Office on the 4th floor of PPF Towers on the Junction of Ohio and Garden streets in Dar es Salaam before it has been shifted to Jamhuri Street.
The Insurance Ombudsman Service is a legal Scheme That Regulates the Insurance Business of Tanzania and is provided for in;
- Section 122,123,124 and 125 of Part IX of the Insurance Act no 10 of 2009 and
- The regulations 1 to 24 of the Insurance Ombudsman Regulation Government Notice no.411 of 2013 made under s.124 (4) and 167 of the Insurance Act, 2009.
It is regulation 5(1) and (2) of The Insurance Ombudsman Regulations, Government Notice no 411 of 2013, made under sections 124(4) and 167 of the Insurance act, 2009, which paved way for the appointment of an ombudsman. Regulation 10 of The Insurance Ombudsman Regulations Government Notice no 411 of 2013, requires the office of ombudsman while carrying on their duties to follow the general principles of ethics that govern insurance ombudsman service, which are: to act independently and objectively in resolving disputes and not to take instructions from any persons in exercising its powers, to apply informal, fair and cost-effective procedures, to take into account interests of a disputant, to give due consideration to the principles of equity and to maintain confidentiality in respect of information about a complaint received, otherwise the ombudsman can be removed from office on the reasons of misconduct or failure of discharging duties.
Insurance Ombudsman Service has administrative powers to register complaints and determine the viability of complaints, however, the insurance Ombudsman has also legal powers to refuse insurance complaints submitted to him if in his view the complaint has no reasonable prospect of success, the complaint is frivolous, vexatious or has been lodged to abused legal process, the complaint can be dealt more appropriately in the court of law or the complainant has not suffered or is not likely to suffer any material inconvenience, distress or financial loss as a result of an action taken by insurance registrant.
S.124 (2) and (3) of the insurance act of 2009, gives the insurance ombudsman investigative powers towards complaints lodged with the scheme, these powers include: requiring the production of documents or information relating to insurance, to institute an investigation into the activities of the insurer, it is with these powers, the insurance ombudsman can negotiate, mediate and reconcile insurance claims disputes and make decisions thereof, the decision of insurance ombudsman can be either to uphold the claim wholly or in part, to dismiss the complaint, to make rulings on procedural or evidentiary nature, to award compensation for financial loss or to make declaratory orders.
Why should Insurance Consumers choose to file their complaints with the Insurance Ombudsman?
The Ombudsman Scheme of Tanzania Provides Immediate resolution of disputes, since the law limits the Insurance Ombudsman Service to resolve insurance disputes brought to them within two months only, it goes therefore that from the date of admission of viable insurance complaint, a determination must be done within sixty days, this saves time and efforts of parties to the disputes of attending lengthy court proceedings.
Also in Insurance Ombudsman Scheme, there are no legalistic formalities and complexities, claimants can simply lodge their claims in writing, electronic or oral as opposed to the court of law where the plaintiff drafts technical and complex legal documents such as plaints, affidavits, and chamber summons which must be drafted by legal experts and advocates. Lodging complaints with the insurance ombudsman service cost an insurance consumer or a claimant only twenty-five thousand Tanzania Shillings, an amount that is relatively low and enhances access to justice in the insurance industry even for those with limited financial resources, also, the Ombudsman scheme observes Confidentiality in resolving their disputes.
However one should bear in mind that, there is a limitation on types of disputes of insurance which the insurance ombudsman has jurisdiction to entertain and determine, like claims relating to railway rolling stocks, aircraft, ships, surety ships and miscellaneous legal expenses, these cannot be resolved by the insurance ombudsman but claimants can file cases to courts with appropriate jurisdiction, moreover, the ombudsman can only administer a complaint whose subject matter has a maximum value of tshs. Forty million and can grant award for direct losses and damages suffered only up to a maximum of Fifteen million tshs.
This article, therefore, is a wake-up call to all insurance consumers with disputes against the insurers that range not above forty million Tanzania Shillings to simply find speedy redress with the Insurance Ombudsman of Tanzania.
Yusto Habiye is the Consultant – at Linex Attorneys