The Australian Financial Complaints Authority (AFCA) started work, supporting independent committees that monitor compliance with industry codes of practice.

AFCA, which launched last Tuesday, replaces the Financial Ombudsman Service (FOS) in handling complaints affecting the financial services sector.

“Importantly, AFCA has also taken over the provision of support to the Code Governance Committee,” Insurance Council of Australia CEO Rob Whelan said. “This ensures continuity.”

The Credit and Investments Ombudsman and the Superannuation Complaints Tribunal have also been rolled into the new organisation, to create a “one-stop shop” for consumers. The Code Compliance and Monitoring Team is a separately operated and funded business unit of AFCA.

AFCA Chairman Helen Coonan says the authority will play an important role restoring trust in financial institutions.

“We will influence reform in the financial services sector by raising standards and improving internal practices to reduce and resolve disputes,” she said.

AFCA has a $1 million limit for insurance disputes, up from $500,000 under FOS, while the compensation cap rises to $500,000 from $325,000.

CEO and Chief Ombudsman David Locke says it will aim to resolve the vast majority of disputes within 90 days.

“If matters are incredibly complicated, have a long history, have multiple issues, it may be longer than that, but certainly the timelines that some issues in the past have taken just won’t cut it,” Mr Locke told ABC radio.

AFCA will also work more closely with the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority and the Tax Office on systemic misconduct issues.

It says it has more than 37,000 members, which are required to transfer from the old organisations, and the potential to deal with more than 55,000 complaints in its first 12 months. AFCA received more than 1200 calls in its first two days of operation, with more than 550 complaints made, a spokesman told insuranceNEWS.com.au.

National Insurance Brokers Association CEO Dallas Booth says FOS Insurance Ombudsman John Price, who will continue in the role with AFCA, brings specialised expertise to the new organisation.