The Australian Securities and Investments Commission (ASIC) is issuing new regulatory guidance on dispute resolution procedures, which could reduce paperwork for insurers and brokers who resolve simple matters early.

ASIC says the guidance to financial industry participants on internal (IDR) and external dispute resolution (EDR) will give companies greater flexibility in settling simple complaints verbally at the IDR stage.

However, ASIC is working with insurance industry representatives to ensure that customers who ring their insurer to discuss their level of coverage do get information about making a claim, and this may lead to an amendment to the general insurance code of practice.

The guidance applies to financial services licensees, credit licensees and some other financial services providers.

It means that a final written response will not be required where a complaint is resolved to the customer’s complete satisfaction by the end of the fifth business day after the complaint has been received, and when the customer has not requested a response in writing.

Where this does not happen, customers will continue to receive a response in writing along with details of EDR processes.

Exceptions to the five-day rule are complaints relating to hardship, a declined insurance claim or the value of an insurance claim. All of these still require a final response.

ASIC says insurance customers often phone their insurer to discuss a potential claim before lodging it, and it will consult with the Insurance Council of Australia and consumer stakeholders on a proposal to amend the general insurance code in these situations.

This change is likely to be made before the next formal review of the code in 2013.