Feathers still flying in ombudsman merger process
The merger of the risk insurance, investments and banking dispute resolution schemes under the Financial Ombudsman Service (FOS) umbrella continues to generate rumblings.
As consumer consultant Phil Khoury prepares to start talking about operational guidelines for the new terms of reference, industry disquiet at the terms of reference approved by the FOS board on May 30 is mounting.
The Australian Securities and Investments Commission (ASIC) is due to sign off on the terms before January 1.
National Insurance Brokers Association CEO Noel Pettersen is concerned about the two definitions relating to “small business insurance products” – one for “insurance brokers” and another for financial services providers other than insurance brokers. As a result, almost identical disputes will be treated differently.
“This must result in confusion and poor administration,” he told insuranceNEWS.com.au. “To make matters worse it is not always clear which of the two definitions applies.”
Suncorp, which filed a submission on the terms of reference, says it is comfortable so far across its insurance and banking operations. But spokesman Jamin Smith cautions that the process is ongoing. “We need to see how they will operate against the guidelines,” he said.
Feathers are known to have been ruffled in the financial and life insurance areas formerly served by the Financial Industry Complaints Service. There has been considerable criticism of the monetary limits for disputes, which was influenced by guidance from ASIC, and the lack of rights for institutions to appeal FOS panel rulings.
Financial Planning Association Deputy CEO Deen Sanders says his association is eager to see what operational guidelines emerge, as a number of sticking points in the terms of reference remain unresolved.
He says financial planners are not concerned about dispute limit thresholds as such but how they can be supported by insurance cover.
“Every time the monetary limits go up, the professional indemnity sector becomes concerned, and that ratchets up the premiums and reduces the availability of cover,” Mr Sanders told insuranceNEWS.com.au.
“We believe it is the obligation of FOS and ASIC, if they insist on specific monetary limits, to make available the marketplace solutions that are government-required.”
As consumer consultant Phil Khoury prepares to start talking about operational guidelines for the new terms of reference, industry disquiet at the terms of reference approved by the FOS board on May 30 is mounting.
The Australian Securities and Investments Commission (ASIC) is due to sign off on the terms before January 1.
National Insurance Brokers Association CEO Noel Pettersen is concerned about the two definitions relating to “small business insurance products” – one for “insurance brokers” and another for financial services providers other than insurance brokers. As a result, almost identical disputes will be treated differently.
“This must result in confusion and poor administration,” he told insuranceNEWS.com.au. “To make matters worse it is not always clear which of the two definitions applies.”
Suncorp, which filed a submission on the terms of reference, says it is comfortable so far across its insurance and banking operations. But spokesman Jamin Smith cautions that the process is ongoing. “We need to see how they will operate against the guidelines,” he said.
Feathers are known to have been ruffled in the financial and life insurance areas formerly served by the Financial Industry Complaints Service. There has been considerable criticism of the monetary limits for disputes, which was influenced by guidance from ASIC, and the lack of rights for institutions to appeal FOS panel rulings.
Financial Planning Association Deputy CEO Deen Sanders says his association is eager to see what operational guidelines emerge, as a number of sticking points in the terms of reference remain unresolved.
He says financial planners are not concerned about dispute limit thresholds as such but how they can be supported by insurance cover.
“Every time the monetary limits go up, the professional indemnity sector becomes concerned, and that ratchets up the premiums and reduces the availability of cover,” Mr Sanders told insuranceNEWS.com.au.
“We believe it is the obligation of FOS and ASIC, if they insist on specific monetary limits, to make available the marketplace solutions that are government-required.”