A letter to the new FSC head

Cedric Stephens, Contributor

A cousin was driving my car last November when she was hit from behind by a bus. I reported the incident to my insurers, who wrote to the insurers of the third party. The police report stated that the bus driver was at fault. The third party insurers refused to accept liability on February 26. They claimed that the driver of my car changed lanes and stopped suddenly in front of the bus. My insurers asked to see written evidence to support that claim. Evidence has not been forthcoming. They continue to deny that the bus driver was at fault. How can this matter be resolved?

- jahshiek@yahoo.com.

"Beware of the regulator." This was the headline of an article in the March 31, 2013 edition of the magazine Reinsurance. An insurance broker colleague sent me a copy of an article about another topic. He mistakenly included an extra page that discussed changes which took place in the regulation of insurance companies in the United King-dom on April 1.

The local insurance industry regulator, the Financial Services Commission (FSC), has a new executive director. The problems that you have encountered with the motor-insurance system over the last six months - and perhaps, thousands of other persons - the contents of the article about the enforcement of insurance regulations, plus the appointment of a new FSC head recently, were the triggers for this type of response to your seemingly simple question.

Regulations, company strategies, process, trained employees and the use of appropriate technology are some of the things that drive an efficient and effective claims process. Have improvements taken place in the settlement of motor claims over the last 30 years? William Potopsingh, LLB (Hons), writing in the September 27, 1985 issue of this newspaper, 'Problems involved in Settling Claims', from the perspective of an insurance company claims manager, said that "any delay in the (claims) process is often (mis)interpreted (by members of the public) as an unwillingness or reluctance on the part of - companies to pay up - (and leads to public distrust)." What actions have insurers taken as an industry to promote trust in the handling of claims? Has the level of trust between insurers and consumers increased, reduced or remained the same since 1985? Are claims being processed more quickly and fairly, or has processing times been reduced or increased? Is the three-month delay in your case reasonable or, is it excessive? Are there protocols in place to stop insurers from acting in an arbitrary manner in the handling of claims like yours when they control the chequebook?

The former FSC equivalent in the UK - the Financial Services Authority - has been replaced by the Prudential Regulatory Authority, an arm of the Bank of England, and the Financial Conduct Authority. According to the article, the two new bodies bring more "direct, intrusive and interventionist approach to regulation - demonstrating (that) mere compliance is not enough; it is the impacts on the market and on consumers (my emphasis) that will count." The new FSC head should try to balance the commission's market conduct and prudential roles instead of dealing largely with prudential issues as it has done since 2001.

Traffic regulations

There is no easy way for me to solve your problem. The drivers of buses, like operators of taxis, are not generally known for obeying traffic regulations and practising courtesy. Some use delays or lies to avoid liability when they cause accidents. Insurers know this. They have tools that can find out the real causes of collisions. Since they write the contracts and control the chequebooks they have the authority to decide when, how much, and who to pay. They can accept or reject what the bus driver told them.

The former head of a now-defunct insurance regulatory body was quietly fired during the 1990s. The action was taken because the agency head launched an independent investigation to find out whether allegations of claims misconduct made against a registered insurer were true. The research was shelved even though a deposit was paid. Who are beneficiaries of the status quo?

The long and the short is you have four options - on paper. The first is to contact an independent claims professional to see if they can help you. The second is to refer the matter to an attorney, assuming of course that it makes financial sense. The third approach, depending on the cost of repairing your car, is to pay the costs out of your own pocket. The fourth option has very long odds and, therefore, is unlikely to provide any short-term gain. Write to the finance minister and ask him to nudge the FSC board to start adopting a more "interventionist approach to regulation" in relation to the handling of motor claims. In the meantime, I will use my soapbox to try to engage the new FSC head in a conversation about problems like yours.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. aegisja@gmail.com