Financial services advisers and other providers owe 165 consumers $10.91 million following determinations by the Financial Ombudsman Service (FOS).

But advisers are unwilling or unable to pay, the latest FOS circular says.

The service has begun legal action over four unpaid determinations.

FOS says although a small percentage of members are involved, unpaid determinations account for 27% of all those issued in the investments, life insurance and super areas.

About 68% relate to financial planning and advice.

FOS has called for a last-resort compensation scheme for consumers, arguing professional indemnity insurance does not work as a compensation mechanism.

The service received 359 life insurance disputes in the September quarter, up 3% on the corresponding period last year.

It received 8174 disputes across insurance, credit and investment, down 1%.

The life industry accounts for 4.4% of all disputes received, a figure that remains stable.

Insurers can resolve disputes at the “received” stage, but if that fails the matter moves to the “acceptance” phase.

FOS accepted 310 life insurance disputes during the September quarter, or 5% of the total.

It is working to reduce its backlog and closed 8927 disputes in the quarter, up 5% on the preceding three months and 2% on the corresponding period last year.

This story was originally published in Life+Health insuranceNEWS.com.au.