Disputes concerning life insurers lodged with the Financial Ombudsman Service (FOS) outnumbered those against financial advisers in the year to June 30.

There were 827 disputes regarding life insurers, compared with 658 featuring financial advisers.

A FOS spokesman told insuranceNEWS.com.au the service does not record how a policy is sold, only which organisation a dispute is lodged against.

A dispute about denial of claim could be recorded as against a life insurer or an adviser, depending which sales channel is targeted.

Disputes against life insurers as the financial service provider totalled 474 in the year. There were 15 disputes against life insurers’ disclosure and 135 regarding service levels.

Most disputes involving advisers involved their advice (341), with 50 regarding charges and 51 relating to disclosure.

Superannuation trustees attracted most disputes regarding service levels (39), with only four linked to advice to fund members.

By life insurance category, income protection products attracted more disputes (534) than lump sum.

Of the income protection cases, 71% were lodged against life insurers compared with 8% against advisers. Super fund trustees attracted 5%.

Most disputes concerned denial of claim, delays in claims handling and claim amounts, according to the FOS annual report.

“FOS continues to be concerned that financial service providers are relying on incorrect policy provisions and are not providing relevant documentation to FOS at the time of disputes,” the report says.

Among lump sum disputes, 47% related to financial service providers’ decisions. Life insurers accounted for 70% of disputes, compared with 13% involving financial advisers and 5% against super trustees.

“Almost one-third of the disputes related to term life insurance products,” the report says.

“The most common issues for term life products were incorrect premiums and denial of claim.”

In total and permanent disability insurance, denial of claim was the most common cause of dispute, followed by claim delays.

FOS accepted 77 disputes related to trauma insurance products in the year, with denial of claim the most common issue.