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  • The complaints process

    The following chart provides an overview of the various paths down which a complaint may proceed when abiding by the Code’s guidelines.

    The objectives and standards of the Code are all about promoting good relations and good insurance practice between insurers and consumers.

    The insurer's aim must be to resolve the complaint, and if there is a systemic problem, fix the underlying problems with their systems and processes.

    The Code sets minimum standards for insurers to adopt when dealing with customer complaints. It is not prescriptive about how insurers should implement procedures and processes, and insurers can go beyond the standards of the Code (if they so choose).


  • A three-stage structure

    The General Insurance Code of Practice outlines a three-stage structure when handling complaints:

    1. Stage 1 – the complaint is initially received
    2. Stage 2 – internal review of the complaint at the customer’s request
    3. Stage 3 – if the customer is still not satisfied with the decision they can take their complaint to an external dispute resolution (EDR) scheme.

    View a simplified digram of the complaints process.

    The Code specifies time limits within which the insurer is expected to abide when dealing with complaints.

    By answering the following questions you can step through the various paths through which a customer’s complaint may progress when an insurer complies with the Code’s guidelines.

    The customer lodges a complaint with you, their insurer.

    Stage 1 - Internal review process

    The Code requires you to make a decision within 15 days.

    Did this occur?

    If you are not able to make a decision within 15 business days the Code requires you to notify the customer within this timeframe and to negotiate a revised timeline.

    Did the customer accept the revised timeline?

    While you continue to process the claim beyond the initial 15 day business period, you need to keep the customer informed on the progress of their claim at least every 10 business days.

    If you cannot come to a decision within 45 calendar days, the Code requires you to notify the customer before the end of the period of the reasons for the delay and inform the customer of their right to take their complaint to FOS, and how to contact them.

    Was a decision made within 45 days?

    When communicating a decision to a customer the Code requires you to in writing:

    • State the decision relative to the complaint;
    • the reasons for the decision;
    • inform the customer of their right to take their complaint to stage two if the decision at stage one does not resolve the complaint to their satisfaction
    • explain the customer’s right to take their complaint to FOS, together with contact details for FOS and the timeframe within which they must take their complaint to FOS if they are still not satisfied with the decision after stage two.

    Did the customer accept the decision?

    The complaint file is closed after reviewing the case to see whether any review and/or rectification action of processes and procedures is required.

    Stage 2 - Review requested by customer

    If you are not able to make a decision within 15 business days, you must notify the customer within the 15 business days and negotiate a revised timeline.

    If you are not able to make a decision within 15 business days, the Code requires you to notify the customer within the 15 business days and negotiate a revised timeline.

    Did the customer accept the revised timeline?

    While you continue to process the claim beyond the initial 15 day business period, you need to keep the customer informed on the progress at least every 10 business days.

    If you cannot come to a decision within 45 calendar days, taking into account the time taken in stage one, the Code requires you to notify the customer before the end of the period to explain the reasons for the delay and to inform the customer of their right to take their complaint to FOS, together with the contact details for FOS.

    Was a decision made within 45 calendar days?

    When communicating a decision to a customer, the Code requires you to do the following, in writing:

    • State the decision relative to the complaint.
    • Give the reasons for the decision.
    • Inform the customer of their right to take their complaint to FOS, together with the contact details for FOS and the timeframe within which they must take their complaint to FOS if they are still not satisfied with the decision after stage two.

    Did the customer accept the decision?

    The complaint file is closed after reviewing the case to see whether any review and/or rectification action of processes and procedures is required.

    Stage 3 - External review process

    External dispute resolution determinations that are made by FOS are binding upon insurers in accordance with the FOS Terms of Reference.

    If FOS advises the customer that the FOS Terms of Reference does not apply to them or their dispute, the customer can seek independent legal advice or access any other external dispute resolution options that may be available to them.


  • Case Study 4 – the Suspect Claim

    Read the following case study before answering the checkpoint question.

    Start

    Jason has submitted a claim for the theft of his motor vehicle. You have had the circumstances of the theft professionally investigated and the evidence suggests that Jason was personally involved in arranging the theft.

    The vehicle was insured under an 'agreed value' policy, which was well in excess of the real market value for this vehicle. At the time of the theft, Jason had been out of work for six months and the car repayments to the finance company were well behind schedule. The finance company was threatening to repossess the vehicle. You feel that these factors provided the motive for Jason to arrange the theft of his own car. You now prepare to advise Jason that you will be denying the claim.

    A week after Jason receives notice of this denial, he asks you for a copy of the investigation report upon which you based your decision.

  • Checkpoint

    What processes will you follow when you notify Jason? What rights does Jason have to contest your decision? How will you respond to his request for a copy of the investigation report?


  • FOS – general insurance external dispute resolution

    External dispute resolution is available to customers and third parties who fall within the FOS General Insurance Terms of Reference.

    It is important to recognise that not all disputes in relation to business insurance products (or, indeed, the customers for such products) will have the benefit of the free external dispute resolution scheme managed by FOS.

    The availability of the FOS dispute resolution scheme to business insurance product customers will depend on an individual insurer's terms of membership of FOS.

    The Code requires insurers to advise customers of the option of seeking independent legal advice or other relevant external dispute schemes where the customer is not covered under the FOS Terms of Reference.

    Referring to those insurance products covered by the FOS Terms of Reference you will see differences between the Code and the Terms of Reference for business insurances in the areas of:

    • customers covered – the Terms of Reference for general insurance only apply to a retail client – wholesale
    • clients are excluded
    • the definition of a small business
    • the excluded classes of insurance, particularly Loss of Profits/Business Interruption and Public and
    • Product Liability
    • the Terms of Reference are more specific in the types of insurance products and perils covered.

    Further, the FOS Terms of Reference limit the monetary cost of claims that can be referred to that scheme.


  • Activity – FOS terms of reference

    Access the FOS website and search for 'Terms of Reference' and 'Operational Guidelines' before answering the following questions.

    Also refer to the FOS websites information on resolving disputes.

    What are the differences between the current FOS General Insurance Terms of Reference and the Code in relation to:

    • general insurance products covered
    • coverage of retail/wholesale.

    What are the monetary limits of compensation for disputes for the following claims:

    Third party claim on a general insurance policy providing cover in respect of property loss or damage caused by or resulting from impact of a motor vehicle

    Claim against a general insurance broker (except where the claim solely concerns its conduct in relation to a life insurance policy).

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