The insurance industry faces a large increase in membership fees for the Financial Ombudsman Service (FOS).

FOS has released a proposed new fee structure that would more than double the maximum levy to $25,000 from $11,000.

The organisation hasn’t raised its fees for three years, and Chief Ombudsman Shane Tregillis says the increase will be used use to clear a claims backlog and provide more timely service.

The Financial Services Council (FSC) has warned that conglomerates will face significant increases when the new fees are applied to each licensee. It is not clear how broker cluster groups will fare under the proposals. More than 400 brokers are FOS members.

The Insurance Council of Australia says FOS fees are “a matter for individual insurers”, and the National Insurance Brokers Association says brokers have not raised the issue with it.

However, Allianz says it is concerned about a lack of consultation in the imposition of the new fees.

“Allianz recognises the need for a review of the FOS fee structure to keep abreast of increasing operational costs and the dynamic nature of managing of disputes over the past few years,” a spokesman told insuranceNEWS.com.au.

“However, it is disappointing that insurers have not been involved in the review before proposed fee changes were determined.”

He says the consultation paper on the proposed fees provides limited information on how FOS will control costs.

“There is little detail of planned improvements in their operational model, managing file management times, increasing services to insurers and other FOS users, or how the increased fees will lead to operational efficiencies within FOS.

“As the majority of FOS expenditure relates to staffing, a critical analysis should be undertaken on the efficiencies of internal practices and the adoption of electronic communications to correctly understand the future costs of file management.”

Complaints to FOS about insurance jumped after the 2011 floods, and Allianz says FOS should consider adopting an operating model that is flexible enough to deal with changing work volumes such as large claims following natural disasters.

This would reduce the cost of staff during low-activity periods.