The financial services ombudsman has lifted its monetary limits under long-awaited changes to its complaints handling regime.

But the Financial Industry Complaints Service (FICS) has curbed original plans to nearly double the sector’s monetary limits for non-life complaints, instead opting for a more modest $50,000 increase to $150,000.

The maximum complaint ceiling for life insurance complaints will increase to $280,000, in line with caps installed by other external dispute resolution (EDR) schemes.

FICS had been planning to increase monetary limits for non-life complaints to $180,000 by mid-next year, with a long-term target of $280,000 by 2010.

Despite the amendments, Financial Planning Association CEO Jo-Anne Bloch says the new limits are a “disappointment, albeit not an unexpected one”.

She says the 50% increase will require financial planners who are members of FICS to review their PI insurance arrangements.

“We are disappointed that FICS raised the limits above $100,000 because we do not believe that this increase was warranted,” Ms Bloch said.

“We are still unsure as to how FICS arrived at an appropriate number, and we are still uncertain as to how FICS arrives at its determinations. Until we understand these sorts of critical issues our members will be opposed to any increase in monetary limits.”

But FICS CEO Alison Maynard says changes to monetary limits have taken insurer and membership concerns into account.

The changes include a six-month implementation gap for financial planners unable to have PI cover in place when the changes come into effect on July 1 next year.

“FICS has undertaken an exhaustive consultation process and the board made its decisions based on a consideration of all stakeholder views,” Ms Maynard said.

The changes include inflation – the limits haven’t moved since 1991 – and pressure from ASIC to raise monetary limits in line with other EDR schemes following the collapse of property group Westpoint.

FICS has also introduced a monthly limit of $6000 a month for complaints dealing with income stream policies, having previously tabled a ceiling of $7000. The limit will be indexed from 2010.

FICS has also given certainty to claimants with a changing quantum. If the value of a complaint rises above the monetary limit after a complaint has been lodged, FICS will continue to arbitrate the claim.

The FICS board will undertake a review of monetary limits in July 2009.