Complaints & Disputes
Complaints & Disputes
POLICY & PROCEDURE
WHITE Insurance Brokers subscribes to the Financial Ombudsman Service (FOS) which offers a way of resolving customer complaints to insurance brokers. It aims to prevent costly litigation.
ASIC’s policy statement PS165 explains the required set up of written internal dispute resolution procedures according to Financial Services Reform Act 2001. Requirements are also based on the Australian Standard for Complaint handling AS 4269-1995, which will give you guidelines about essential elements of effective complaints handling procedures. It serves as a reference document on current best practice for handling complaints (for further information phone 1300 654 646 or look up www.standards.com.au). According to AS4269-1995, the essential elements of an effective complaints handling process shall, as a minimum, satisfy the following criteria:
• Commitment to efficient and fair resolution of complaints by people in the organisation at all levels;
• Fairness of the complaint handling process;
• Adequate resources for complaints handling;
• Complaints handling process should be visible to consumers and staff;
• Complaints handling process should be accessible and readily available to consumers and staff;
• Assistance shall be available to formalise and lodge a complaint;
• Responsiveness – a complaint shall be dealt with quickly and professionally at no charge to the complainant;
• The process should be able to identify and rectify systemic and recurring issues;
• Have accountability and appropriately documented performance standards;
• Reviews conducted on a regular basis to ensure efficient delivering and effective outcomes.
One requirement is that we nominate a member of staff as the ‘complaints manager’ or ‘customer relations manager’. This should be a senior person, with the authority and expertise to make decisions regarding client complaints or disagreements. White Insurance Brokers has appointed Richard White as the Complaints Manager. The complaints manager will act as FOS contact point for our firm, read and understand the Code and FOS Terms of Reference, handle client complaints, attempt to resolve disagreements within 10 working days, set up a monitoring and recording system for complaints, refer clients to FOS (where a complaint or alleged breach of the Code is unresolved), submit an Annual Complaints Report to the FOS, make clients aware of the FOS and Code, complete the Compliance Checklist and submit it to FOS, ensure all staff and agents are trained to comply with the Code’s requirements.
THE FINANCIAL OMBUDSMAN SERVICE
Based in Melbourne, the FOS is managed by the Chief Ombudsman Colin Neave AM. It is industry funded and its service is free for consumers.
The FOS’s primary aim is to help resolve disputes between brokers and clients, avoiding the need for potentially costly litigation. It also makes a dispute resolution process more accessible to consumers.
Policies covered by the FOS include general insurance products provided to a retail client as defined in section 761G (5) of the Corporations Act 2001 (Cth) (the “Act”) and Life policies as defined in the Life Insurance Act 1995. Brokers can choose to include other policies if they wish.
The FOS only handles disputes in relation to general insurance products and life policies, which involve claims of up to $100,000, except where the member waives this limit and the member’s Professional Indemnity Insurance has given its written consent. FOS. The facility can also handle complaints involving small business policies up to $100,000. FOS Terms of Reference set out in more detail the types of dispute handled. As a participating general insurance broker we also agree to adopt the self-regulatory General Insurance Brokers Code. The Code only applies to general insurance matters and is designed to minimise problems in the first place. The FOS’s Chief Ombudsman also deals with breaches of the Code. Summaries of all complaints and determinations are being published on a regular basis and are available on CD.
Financial Ombudsman Service
GPO Box 3, Melbourne, VIC 3001
Phone 1300 780808, Fax 03 9613 6399
WHAT IS INCLUDED
Disputes between a broker and an insured where a claim against a broker is:
• Less than $100,000
• In relation to domestic insurance policies (including motor, home & contents, sickness & accident, consumer credit, travel, life insurance or domestic property.)
COMPLAINTS AND DISPUTES
The terms “complaints” and “disputes” should be considered as interchangeable. In all of the documents produced by FOS the term “dispute” is used. Not all complaints are disputes. Many are simply the result of poor communication and can be easily resolved. However, clients will not differentiate when it comes to serious complaints they are prepared to lodge formally. These are the issues that as an industry, we need to monitor and handle. It is difficult to define what is a complaint, however, it can be any expression of dissatisfaction, whether oral or written, and whether justified or not, about a service of activity relating to financial services offered, provided or withheld by a company. Any complaints handling policy needs to acknowledge that:
• Your customers have the right to complain about goods and/or services purchased, and to have that complaint dealt with;
• Complaints can provide you with feedback about goods and/or services being offered; and
• Receiving a complaint gives you the opportunity to assess the impact on the market of certain goods and/or services.
WHAT SHOULD STAFF DO
• Read and understand this procedure
• Identify yourself, listen (or read carefully), take details, find out what the complainant wants;
• Confirm with the customer the details you have taken;
• Empathise with the customer and be courteous;
• Avoid laying blame or being defensive;
• Assess the responsibility of your business in respect of the customer’s complaint;
• Explain the application of the relevant resolution policy or regulatory activity;
• Conduct a prompt and thorough investigation of the charges;
• Work with the complainant to achieve an informal resolution;
• If a resolution of the complaint is not immediately possible, make a commitment to do something realistic and achievable about resolving it, even if someone else will eventually handle the complaint;
• Avoid creating false expectations;
• Ask if the complainant is satisfied with the action taken or proposed in respect of the process and the redress. If the complainant is not satisfied, give advice about available alternatives;
• Make the complainant aware of external complaints handling systems available;
• Provide an acknowledgment of contacts by letter or phone as appropriate, taking care to record your responses;
• Identify problems, if necessary, within your business, and address those that require remedy; and
• Follow up, monitor and provide feedback to each party involved in the complaint;
• Complaints that are not resolved swiftly can generate significant additional workload for an organization;
• Inform your Professional Indemnity Insurer in any instance where a lawyer represents the complainant, or where legal action is threatened.
• Remember, it is important to take prompt action on the complaint. Never ignore a complaint or make light of it, even if initially you think it is frivolous.
• Encourage the client to provide full details of the complaint
• Use the “Customer Complaint Form” to record the complaint details
• Let the client know that this complaint will be followed up within one (1) working day and resolved within ten (10) working days
• Give the client the notified date as a complaint number (e.g. notified date is 7 Feb, 2001 – 07022001)
• Each registered broker has to nominate a Complaints Officer / Manager, who is responsible for managing the internal disputes procedure, including records and reports
• The Complaints Officer to manage all customer complaints and to try to resolve them
• The Complaints Officer to be responsible for relevant reports and procedures
The complaints manager will act as FOS contact point for our firm, read and understand the Code and FOS Terms of Reference, handle client complaints, attempt to resolve disagreements within 10 working days, set up a monitoring and recording system for complaints, refer clients to FOS (where a complaint or alleged breach of the Code is unresolved), submit an Annual Complaints Report to the FOS, make clients aware of the FOS and Code, complete the Compliance Checklist and submit it to FOS, ensure all staff and agents are trained to comply with the Code’s requirements.
HOW DISPUTE RESOLUTION WORKS
After a client has made a complaint, the member must first attempt to resolve the problem internally. If the problem is unresolved after 10 working days, the member should refer the matter to FOS for conciliation. If the dispute is still unresolved after 20 working days, the FOS’s Ombudsman will refer it to the Referee for final determination. Members will be bound by the Referee’s decision. Insureds are not bound, but can adopt a decision by consent.
• Dispute reviewed by member’s internal complaint facility.
• Unresolved after 10 working days.
• Dispute referred to FOS.
• Ombudsman seeks a solution acceptable to both parties.
• Decision is not binding on member or insured.
• Member charged a conciliation fee.
• Unresolved after 20 working days.
• Ombudsman automatically refers dispute to Referee for final determination.
• Decision is binding on member but not on insured.
• Member charged a determination fee.
IF THE DISPUTE GOES TO THE FOS
Members will be charged for each complaint handled by the FOS on their behalf. There is an initial cost for complaints dealt with by the Ombudsman. A further cost is incurred for complaints referred to the Referee. Fees are charged to the member irrespective if the matter is conciliated, determined in favor of the member, or in favor of the consumer.
Fees (incl GST) effective 01 January 2007 are as follows:
Complaint conciliated Resolved by parties after initial referral to member $60
Complaint conciliated Resolved by parties after summary of complaint provided by FOS $120
Complaint conciliated Finding issued in favor of member $180
Complaint conciliated Finding issued as compromise $240
Complaint conciliated Finding issued in favor of consumer $300
Complaint determined In favor of member $420
Complaint determined As compromise $630
Complaint determined In favor of consumer / against member $840
• If the complainant remains dissatisfied, then s/he can take legal action as s/he wishes.
• If the complaint is in regards to the policy itself and it appears to be a complaint against the insurance company and should be referred to the Insurance Ombudsman Services Ltd (IOS) or other relevant facilities