Two organizations who regulate the financial institutions:
the prudential supervision of – Banks, firms investing on the stock exchange and Insurers
firms and the market conduct of all firms.
responsible for Claims Handling standards:-
iii. Customers are kept informed about the claims in process
vii. Insurer or an intermediary must manage conflicts of interest. eg: Motor or Liability policy, claim with several
parties whether insureds or not.
viii. In respect of consumers, ICOBS does not allow insurer the right to avoid a claim for innocent misrepresentation, there is
no qualifying misrepresentation under CIDRA 2012. However, where fraud is involved, insurer can deny claims.
connected to the breach.
xii ICOBS require firms to retain records, for its own business reporting, the FCA and such information to deal with clients queries /complaints
Consumer Insurance Disclosure and Representation Act 2012 (CIDRA 2012):
with utmost good faith and disclose all material facts to each other.
what terms. This was burdensome on proposers as they were required to know what the insurer wants to known.
care not to make a misrepresentation. This has removed the previous duty via Utmost Good Faith.
but did not care. (Insurer may avoid the contract)
Insurance Act 2015 (IA 2015):
each other. Note 3 changes to insurance law under the IA2015:-
further enquiries into those circumstances.
known or aught to be known by the proposer who becomes the insured.
responsible for the insured’s insurances. For example, a broker.
responsible for the company’s insurances for example a risk manager.
Insurance Act 2015 (IA 2015) cont’d:
it can show that it was not ware of the fact. There need not be any claim in question, just the breach.
iii. Now, for Deliberate or Reckless breaches, the insurer’s options are:
iv: For Innocent or Careless breaches, the insurer’s options are:
insurer would have done, had they known about the information which has come to light.
The Enterprise Act 2016 (EA 2016):
iii. What is reasonable considers all circumstances such as, size, complexity, regulations, delays by client.
Disputes & Complaints:
First Party Disputes:
Financial Ombudsman Service (FOS) is a free, independent and impartial service that deals with unresolved disputes. Membership is compulsory for all authorized firms including intermediaries.
iii. The FOS only deal with complaints from eligible complainants such as:
Disputes & Complaints cont’d:
Financial Ombudsman Service (FOS) Cont’d
iii. 3 years after the complainant knew or should have know that they had a cause for complaint
vii. All authorized firms must cooperate with the FOS
viii. FOS must investigate and aim to reply with 3 months, most disputes are settled by mediation or adjudication
c. Funding: The FOS is funded by a levy on all authorized firms. A case fee is paid by the complainant.
the requirement is to go with the insurer behind closed doors to resolve same. This disagreement is
called a disagreement in respect of Quantum (not liability under the policy).
will sit in chair.