Gap cover claims and complaints: what the rules give you

When an insurer refuses or reduces a gap cover claim, the Policyholder Protection Rules say what it must do next: give you its decision in writing within 10 days, with reasons, tell you that you have at least 90 days to respond, offer an internal review, and point you to the ombud. This guide explains those steps.

Olvian is a lead-referral service, not an insurer, broker or adviser. This guide describes the rules; it cannot tell you whether a particular claim should be paid.

How does a gap cover claim work?

The Demarcation Regulations define gap cover by reference to the amount your medical scheme paid. The benefit covers all or part of the difference between the cost of a health service and that payment. So the usual order is that the scheme deals with the account first and the gap claim follows. Our guide on what gap cover pays explains why.

The Regulations do not prescribe claim forms, documents or deadlines for submitting a claim. Those are in the policy. Ask the provider who calls you for the claims process in writing: what documents, from whom, and by when.

What must an insurer do once it has my claim?

The relevant rule is Rule 17.6 of the Policyholder Protection Rules made under the Short-term Insurance Act, as published by the Financial Services Board in December 2017.

• Decide. Rule 17.6.1 says the insurer must accept, repudiate or dispute a claim, or its amount, "within a reasonable period after receipt of a claim".
• Tell you in writing. Rule 17.6.2 says it must notify you in writing within 10 days of taking the decision.

"Repudiate" is defined in the Rules as any action by which an insurer rejects or refuses to pay a claim or any part of one, for any reason. A partial payment can therefore be a repudiation of the rest.

What must a refusal notice contain?

Rule 17.6.3 says that if an insurer repudiates or disputes a claim or its amount, the notice must in plain language tell you:

• the reasons, in enough detail to let you dispute them if you choose;
• that you may make representations to the insurer within a period of not less than 90 days after you receive the notice;
• how the insurer's internal claim escalation and review process works;
• your right to lodge a complaint with the relevant ombud, with contact details and the time limits and legislation that apply;
• if the policy has a time limitation for legal action, what it says and what it means for you; and
• if it does not, the prescription period that applies under the Prescription Act, 1969.

If the decision was made for the insurer by another person, Rule 17.6.4 requires that person to give the notice, name the insurer, and say that any recourse or enquiries must go to the insurer itself.

What is the internal review?

Rule 17.5 requires an insurer to have a claims escalation and review process, and says it must be allocated to an impartial, senior functionary. The Rules also allow the insurer to run it as part of its complaints process.

Once you make representations through it, Rule 17.6.5 requires the insurer to give you its decision in writing within 45 days of receiving them. If it still refuses, the notice must again give reasons, include the facts that informed the decision, and repeat the information about the ombud and time limits (Rule 17.6.6).

Put your representations in writing, say what you disagree with, and attach anything new. Keep copies and the date you sent them.

How long do I have to go to court?

The Rules protect you here. For a policy entered into on or after 1 January 2011, Rule 17.6.8 says a time limitation clause for legal action:

• may not count the 90-day representation period; and
• must give at least six months after that period expires.

Rule 17.6.9 says a claimant may ask a court to condone non-compliance with a time limit if there is good cause and the clause is unfair to the claimant. Rule 17.6.10 says that, for section 12(1) of the Prescription Act, a debt is due after the 90-day period has expired.

This is a legal timetable, so if a deadline is close, a lawyer or legal clinic can tell you where you stand. Olvian cannot.

How do I complain to the ombud?

Complaints about insurers go to an ombud scheme. The National Financial Ombud Scheme says its jurisdiction covers non-life insurers and life insurers, and that it can only look at a complaint "after you have first lodged it with your bank, credit provider or insurer". Its service is free to the complainant.

Its process, as it describes it:

1. You receive an acknowledgement letter.
2. The insurer is asked for a written response within 21 working days, if you did not lodge the complaint with it first.
3. You may comment on the insurer's response.
4. After investigating, the scheme may issue a ruling or make a recommendation.

The scheme asks for the insurer's name, your policy number, your contact details, a short factual summary, and copies of the correspondence. If a representative complains for you, a written mandate is needed. The online form is at nfosa.co.za.

Which Policyholder Protection Rules apply depends on whether the policy is written as a short-term or a long-term policy. We have read the short-term rules. The policy documents, or the provider, can tell you which applies.

What if the problem is with my medical scheme, not the gap cover insurer?

They are separate decisions made by separate bodies. If the scheme refused or short-paid an account, use its dispute process, and if that fails a written complaint can go to the Council for Medical Schemes under section 47 of the Medical Schemes Act. A scheme decision can be appealed to the Council by affidavit within three months under section 48.

What should I keep while a claim is open?

Keep everything in one place: the policy schedule, the claim form and the date you sent it, the scheme's statement showing what it paid, any hospital or specialist account, and every letter or email from the insurer. If you speak to someone by phone, note the date, the name and what was said, and follow up in writing.

If a claim is refused, the date you received the notice matters, because the 90-day representation period runs from the date of receipt. Write the date on the letter.

What should I ask the provider who calls me?

Olvian does not advise on whether anyone needs gap cover. These are factual questions:

1. How do I submit a claim, and which documents does the insurer need?
2. Is there a time limit for submitting a claim?
3. Who decides a refused claim on review, and how do I reach them?
4. Does the policy contain a time limitation clause for legal action?
5. Which ombud deals with complaints about this policy?

Sources

• Policyholder Protection Rules (Short-term Insurance), replacement notice, Government Gazette 41329, 15 December 2017: Rules 17.5 and 17.6. https://www.gov.za/sites/default/files/gcis_document/201712/41329gon1433.pdf
• Regulations under the Short-term Insurance Act, 1998, Part 7, Government Gazette 40515, 23 December 2016: regulation 7.2(1), category 1. https://archive.treasury.gov.za/legislation/regulations/FinalDemarc2016/GG_ST%20Demarcation%20Regs.pdf
• National Financial Ombud Scheme, home page and how to complain. https://nfosa.co.za/ and https://nfosa.co.za/how-to-complain/
• Medical Schemes Act 131 of 1998, sections 47 and 48, as consolidated by the Council for Medical Schemes. https://www.medicalschemes.com/files/Acts%20and%20Regulations/MSACT19DEC2003.pdf

The Rules have been amended since 2017. Check the current text on the Financial Sector Conduct Authority's website before relying on a rule number.