Adjudicators appointed to hear Financial Ombudsman Service (FOS) disputes must have an intimate knowledge of the insurance industry, RACQ Insurance says.

Complainants and financial service providers alike will be supported if this is the case, it told a consultation into the service’s terms of reference.

An independent review has suggested appointing adjudicators who would have direct contact with all parties, streamlining the current dispute process.

It also proposes letting FOS reduce timeframes at any stage of disputes.

But RACQ Insurance says while there are strict rules about extending timeframes, there are no detailed criteria for cutting them.

Providers have no opportunity to negotiate on reduced timeframes they consider unreasonable.

Some uninsured motor vehicle parties have limited access to FOS, and it can award a maximum $3000. RACQ Insurance rejects a recommendation to increase the cap.

The insurer supports current FOS guidelines stating that before accepting a dispute from an uninsured third party, the driver of the insured vehicle must have comprehensive cover.