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agreement over broad issues could speed up the dispute process – although it might also be difficult to achieve. Conciliation with one particular insurer – he doesn’t name companies – has shown that disputes can be handled more quickly and effectively. FOS acted as conciliator between the insurer and consumers. “In all of these matters the consumers involved were very grateful for the opportunity to sit down and talk about their issues and grievances with the insurer,” he says. “The insurer was fabulous in dealing with these matters and embraced the concept of resolving the issues.” Mr Price believes this restored the insurer’s brand loyalty and enabled a fair outcome for the company and its customers. While some work must be done beforehand to prepare for conciliation, he says it’s quicker than going to a determination. “We are hopeful that less complex matters can be resolved through communication and discussion between the parties, fostered by us as part of our process.”

an excellent job in steering them through the process. The law services’ insurance expertise has grown as a result. Mr Price notes that Victorian Legal Aid does not provide an insurance advice service, unlike its counterparts in New South Wales and Queensland. He says community legal services in Victoria therefore don’t necessarily have the expertise to help on insurance matters. “I think we do need to look at whether there are funds available through legal aid or some other means to assist in establishing that level of expertise,” he says, adding that simple disputes can often be resolved earlier at this level. As for disputed claims that have dragged on, FOS is still getting complaints from the Queensland floods because claimants have exhausted their insurers’ IDR systems and have finally found the energy to take the matter to FOS. Alternatively, they have heard about someone who has had a successful outcome from the ombudsman. Mr Price and his team are bracing for a new round of enquiries following

“The consumers involved were very grateful for the opportunity to sit down and talk about their issues and grievances with the insurer.” The communications lesson hasn’t been lost on FOS itself. The service is looking at how to cut red tape to improve its own communication with insurers and consumers. It recently began a trial of electronic transfer of case files with two insurers, which Mr Price hopes will speed up the process, reduce costs and be more efficient for all involved. The trial with a large and a small insurer began in August and so far the results are positive. This raises the likelihood of the system being rolled out to more insurers and other financial services providers who are also members of FOS. Mr Price says the time taken to resolve general insurance disputes has not blown out much, but disputes are becoming more complex. He says this is “part of the territory”, where policies are adapted to meet the changing needs of a growing community. As for insurance brokers, FOS has not seen many disputes involving brokers – “far less than I would have expected”. Mr Price attributes this to most brokers keeping good records and working to resolve disputes early. Some brokers have criticised consumer lawyers for advising clients to take the legal route on a dispute rather than use the free FOS service, but Mr Price says he has not seen instances of that. He says although some consumers might need help with their dispute, the various consumer law services have been doing insuranceNEWS

October/November 2012

September’s decision that RACQ Insurance must pay out to a policyholder in Goodna, south of Brisbane, after FOS ruled that flash flooding rather than riverine flooding was responsible for their losses in January last year. The decision prompted Goodna councillor Paul Tully to urge all flood victims in Ipswich and Brisbane whose claims have been refused to appeal to FOS. Mr Price says Councillor Tully’s comments are misinforming consumers. “As we constantly say, each individual dispute will depend on the particular factors associated with that dispute.” He fears the Goodna case could give people a false impression about their entitlements. As soon as the FOS decision was publicised, the service started receiving new enquiries. “It is clear that people do not understand the particular characteristics of that decision.” Mr Price believes the standard definition of flood and new key facts statements that summarise key elements of a policy will probably reduce disputes, as long as consumers understand the statements do not replace their policy document. He says the industry has “stepped up and done the work” in its response to many issues that arose from the floods. “I think the industry is probably more advanced than the Federal Government in terms of resolving these issues.”

Profile for Insurance News (the magazine)

OCT/NOV 2012 - Insurance News (the magazine)  

The relaxed atmosphere at the annual Reinsurance Rendezvous in Monte Carlo belies the serious business dealings and massive amounts of money...

OCT/NOV 2012 - Insurance News (the magazine)  

The relaxed atmosphere at the annual Reinsurance Rendezvous in Monte Carlo belies the serious business dealings and massive amounts of money...