Troubled short-term insurer Orange Insurance has been ordered to pay two separate amounts, R101 790 and R70 017, plus penalty interest of 15.5 percent a year back-dated to November 2008, for motor vehicle claims.
Financial advice ombud Noluntu Bam ordered the payments in terms of her catch-all authority under the Financial Services Ombud Schemes Act whereby she may rule on a complaint that does not fall under the jurisdiction of any other ombud scheme.
Orange Insurance initially acknowledged the claims by Johannes Potgieter, of Germiston, and Mcebo Mnyandu, of Vosloorus. Potgieter’s claim for R101 790 arose from a hijacking and that of Mnyandu, for R70 017, from an accident. In the case of Mnyandu, the insurance company initially issued an agreement of loss in November 2008, but then refused to pay up.
Both Potgieter’s and Mnyandu’s policies had been issued by Fleetsure, with Orange as the underwriter. Orange refused to settle either claim – along with many others – because, it said, Fleetsure had not properly transferred its business from the books of Zurich Risk (previously SA Eagle) to itself.
Bam rejected Orange’s argument and found that it was, in fact, the underwriter of the insurance contracts.
Bam has previously issued determinations against Orange to pay policyholders whose claims were rejected.