An Overview of Settlement of Insurance Disputes by the Insurance Ombudsman in Tanzania
- Appointment and powers of the Ombudsman
- Dispute Settlement Mechanisms
- Time for determination of disputes
- Compliance and Enforcement of Awards
The Tanzania insurance sector has been growing steadily in recent years. According to the Tanzania Insurance Report, 2016 issued by the Business Monitor International Limited, there will be a growth in insurance premiums by 16.4% on average between 2016 and 2020. Motor insurance is said to be growing at a higher pace than other types of insurance.
The growth in the insurance sector in Tanzania has led to an increase in insurance claims. Insurers have found themselves at loggerheads with the insurance consumers due to disputes arising out of insurance claims. In Tanzania, insurance disputes between insurance consumers and insurance registrants may either be settled by court process or by the Insurance Ombudsman. On the other hand,there is an Insurance Tribunal which determines disputes arising from decisions of the Commissioner of Insurance exercising his powers conferred by the Insurance Act, 2009. If one is not satisfied with the decision of the Insurance Tribunal, he may appeal to the High Court. In the same vein, a person aggrieved by the decision of the Ombudsman may make reference to the High Court against the decision of the Ombudsman.
Our Insurance law experts at Breakthrough Attorneys, through this article, resolved to give an overview of dispute settlement by the Insurance Ombudsman in Tanzania. This article will enlighten the understanding on the part of the public regarding services of the Insurance Ombudsman in Tanzania.
2.0 Establishment of the Ombudsman Service in Tanzania:
Section 122(1) of the Insurance Act, 2009 (‘the Act’) establishes the Ombudsman Service in Tanzania for settlement of insurance disputes arising between insurance consumers and insurance registrants in Tanzania.
The Insurance Ombudsman is appointed by the Minister for Finance (‘the Minister’) in consultation with the National Insurance Board (‘the Board’). The Ombudsman should be a person with adequate knowledge and experience in legal matters and dispute settlement. The Board proposes three names to the Minister whereby the Minister selects one name out of the three names submitted by the Board.
On appointment, the Ombudsman is sworn by the Chief Justice before commencement of his duties. The Ombudsman holds office for a term of five years and may be re-appointed for a further term of five years.
3.0 Powers of the Ombudsman:
The functions and powers of the Ombudsman include, among others,the administration of all complaints filed by insurance consumers with monetary value of maximum Tanzanian Shillings Forty Million (TZS 40,000,000) and issuance of an award upon arbitration for direct losses and damages suffered by the Complainant up to the maximum of Tanzanian Shillings Fifteen Million Shillings (TZS 15,000,000). This means that the Ombudsman may determine a claim whose value does not exceed TZS 40 Million but his award should not exceed TZS 15 Million. If the Ombudsman is of the view that the award may exceed the statutory limit of TZS 15 Million; he will advise the parties to prefer the matter to a court of law.
Furthermore, the Ombudsman has powers to conduct investigation for determination of viability of the complaint and conduct of mediation, reconciliation and arbitration. In the course of determination of a complaint the Ombudsman may also give advice to both complainant and insurance registrant as to the best way of resolving a dispute either before the Ombudsman or file the same in a court of law.
4.0 Mechanisms of dispute settlement by the Ombudsman:
Dispute settlement by the Ombudsman is done throughmediation, reconciliation and arbitration. The process of reconciliation and/or mediation involves an interaction between the Ombudsman playing the role of a mediator and the parties with a view of reaching an amicable settlement. This involves separatemeetings between the Ombudsman and the parties before a disputeis settled. It is from these meetings, parties will reach at a consensus to have their dispute settled amicably in the presence of the Ombudsman.
On determination of the complaint, the Ombudsman may decline to consider the complaint, uphold the complaint either wholly or in part, dismiss the complaint, award compensation, order the insurance registrant to pay the principal sum plus interest at the rate of 5% and issue declaratory orders to the insurance registrant.
4.1 Mode of filing complaints before the Ombudsman:
Regulation 13(1) of the Ombudsman Insurance Regulations, 2013 (GN. No. 411 of 2013)(‘the Regulations’) provides that complaints may be made to the Ombudsman in writing, electronically or orally. This is made to make it easier to the complainant to lodge his complaint to the Ombudsman without being required to file formal pleadings which may be cumbersome to some complainants.
4.2 Rejection of Complaints on filing:
Regulation 13(2) of the Regulations empowers the Ombudsman not consider a complaint, where:
(a) such complaint is, or if it has been, the subject of legal proceedings instituted and not withdrawn in the court of law;
(b) legal proceedings are contemplated to be instituted by thecomplainant against the insurance registrant, during such timeas the complaint remains under advisement by theOmbudsman;
(c) it has previously been determined by the Ombudsman, unlessnew evidence likely to affect the outcome of a previousdetermination has thereafter become available; or
(d) three years or more has lapsed from the date on which thecomplainant became aware or should reasonably have becomeaware that the complainant had cause to complain to theOmbudsman.
4.3 Time for determination of Complaints by the Ombudsman:
Once the dispute is considered to be viable by the Ombudsman, it should be determined within 60 days from the date of admission.
4.4 Compliance and Enforcement of the award:
An insurance registrant is required to comply with the award issued by the Ombudsman within 30 days from the date of determination unless reference of the award is preferred to the High Court (Regulation 21 of the Regulations).
Where an insurance registrant fails or refuses to comply with the determination made by the Ombudsman, the Ombudsman may give notice to the insurance registrant requiring compliance with the award within 14 days or such further period as the Ombudsman may determine. When the insurance registrant refuses to comply with the notice resort is made to the Commissioner of Insurance who may impose sanction including penalty and cancelation of license.
Dispute settlement by the Insurance Ombudsman is viewed as time saving and free from legal technicalities. It is easy for every complainant to access the services of the Ombudsman. The court process takes long and is costly since parties have to engage advocates. Advocates are restricted to appear before the Insurance Ombudsman for representation of parties thereto.
The Insurance lawyers at Breakthrough Attorneys, through interaction with various insurance clients,have noted that the general public who are the consumers as well as many advisors to these consumer areunaware of the existence of, and if they do, they do not know the role of the Insurance Ombudsman. This article highlights the method of dispute settlement by the Ombudsman and general powers thereto. It is our hope that parties to insurance disputes within the legal ambit of his jurisdiction, will make use of the Ombudsman in all disputes falling within the jurisdiction of the Ombudsman as highlighted above.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.