tdgeek:

 

The Ombudsman and the Government and Opposition need to legislate that these terms are simpler to understand.

 

FWIW, the Ombudsman and the Insurance Ombudsman are completely different.

I'm surprised at the level of confidence some people seem to have in insurers "doing the right thing" morally.

When there's a dispute, it's not easy to sort. 

The OIO seems like a great thing - I have my doubts.  Before the Insurance Ombudsman can get involved to resolve a dispute "deadlock" must be formally declared.  The customer doesn't get to declare when "deadlock" is reached - only the insurance company does.  Your alternative is to sue the insurer through the court system.
If I was the insurer, I'd probably only want to declare "deadlock" promptly in cases with high expectation that the OIO was going to rule against the client in a dispute.  The ones where the customer might win, the insurer may be inclined to delay, distract, and defer for as long as possible.  Let the client try to sue through the courts. They'll run out of cash long before the insurer does.

A couple of young litigation lawyers I know have worked consecutively for the same large firm in recent years.  One found the experience so unpleasant he was determined to give up law entirely and resigned.  By coincidence I know his replacement at that firm quite well.  They tell the same story.  The "insurance jobs" come into the office and get allocated - nobody wants them.  If you're young and (still) keen they end up on your desk.  It's soul destroying.  You're given a client (with limited financial resources) to fight a case. You're probably going to lose - because the insurance company will throw 10x the resources into the case than you've got available.  The clients have stewed over the situation for years of delays and have also dug in - reluctant to take a settlement for less than they believe is due. 

I wouldn't expect government to intervene with a heavy hand.  If they do, then if the insurers consider it too onerous. they'll walk away from the NZ market - which would be extremely damaging to the economy.

Pays to remember that the insurance industry was originally founded on the basis of shared risk, the "mutual" model which since the demise of AMI in NZ is now gone.  Once, the primary objective was to share risk between policyholders, now the primary objective is to return as much profit as possible to shareholders.