Cedric Stephens | Robust rules needed for insurance complaints
I owe a big debt to the leaders of the Integrity Commission. They stimulated the ideas on which today’s article is based.
What do these folks have to do with the topic that I write about each week? They published a four-column advertisement in last week’s Sunday Gleaner that provided details about their institution’s 11-part complaints policy. There is a direct connection between the contents of their ad and the piece that I wrote in the same newspaper that same day.
Injured Party, a complainant, was injured in a motor vehicle collision that was caused by another motorist. She claimed against the negligent party’s insurer. After a year-long wait without any action, she complained to the Insurance Association of Jamaica, IAJ. No action was forthcoming. Her efforts to seek redress were a complete waste of time.
She learned afterwards that the insurer that failed to promptly deal with her claim was an IAJ member. Injured Party was unaware that she should have filed the complaint with the industry regulator, Financial Services Commission – www.fscjamaica.org. Whether the outcome would have been any different is doubtful.
I have long suspected that the FSC’s complaints-handling policies were “below standard”. The belief was based on my interactions with some FSC employees, plus the comments of several persons who had filed complaints with the commission. Injured Party’s ignorance about the insurance regulator’s complaints-handling function and my quick comparison of the IC’s complaints policy statement with those of the FSC confirmed my suspicion.
The information published on the FSC’s website about how it manages complaints is ‘below standard’. For example, the policy does not appear to be explicitly or implicitly connected to its mission and other functions. Complaint management appears to be an activity that the organisation would prefer to avoid. The Integrity Commission’s policy statement, on the other hand, seems consistent with and integral to the carrying out of its mission.
The FSC’s complaint-handling policies bear little resemblance to those recommended by the International Association of Insurance Supervisors to which the local body is affiliated.
The Integrity Commission’s policy statement about how its handles complaints also led me to examine the complaints-handling standards that the FSC imposed on the insurance industry in Section 10 of its 2019 Market Guidelines. They read:
• Complaints should be settled in a timely, effective, and fair manner. Insurers and intermediaries should have written procedures/policies in place for the proper handling of complaints from customers. The procedures/policies should be made widely available to policyholders (example, via the company’s website, notices, and noted in literature shared with the policyholders, etc).
• At a minimum, the commission recommends that the complaints procedures provide that the insurer/intermediary will:
• Acknowledge each complaint in writing within five business days of the complaint being received;
• Provide the complainant with the name of one or more individuals appointed by the insurer/intermediary to be the complainant’s point of contact in relation to the complaint until the complaint is resolved;
• Provide the complainant with regular written updates on the progress of the investigation of the complaint at intervals of not greater than 20 business days;
• Attempt to investigate and resolve a complaint within 40 business days (eight weeks) of having received the complaint. Where the 40 business days have elapsed and the complaint is not resolved, the insurer/intermediary will inform the complainant of the anticipated timeframe within which the insurer/intermediary expects to resolve the complaint;
• Advise the complainant in writing of the outcome of the investigation, within five business days of the completion of the investigation of a complaint, and where applicable, explain the terms of any offer or settlement being made;
• Log and keep a record of all complaints and the actions that were taken to resolve them. The log and record must be available for examination by the commission, in accordance with regulations 142(3) (p) and (q) of the Insurance Regulations.
These rules are not worth the paper or the digital space they occupy. There were no complaints tabs on the websites of four insurers – one life and three non-life – that I looked at. The IAJ’s home page was not any different.
The Integrity Commission has set a high standard for complaints-handling, which the FSC, insurers, and intermediaries should emulate.
Another quick internet search found a 3,700-word complaint-handling policy template that was developed for use in Australia and New Zealand. It can be easily altered to meet local conditions.
The drafting and implementation of a more robust complaint-handling process would be a welcome gift to mark the 20th anniversary of the Insurance Act in 2021. It would also add more integrity to the risk transfer system and promote financial inclusion. Any takers? I am available.
- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: firstname.lastname@example.org