Insurance Disputes in Australia – Who can Help?

Using the Financial Ombudsman Service for Insurance Complaints

Jul 15, 2009

For those with an Australian insurance claim dispute or rejected claim, the Financial Ombudsman Service can help. This independent organisation provides a free service.

An Australian scheme named the Financial Ombudsman Service (FOS) began on 1 July 2008 following a merger between the Insurance Ombudsman Service (IOS), the Financial Industry Complaints Service (FICS) and the Banking and Financial Ombudsman Service (BFOS). There will be a transition period of 18 months during which IOS, FICS and BFOS will continue to operate until 1 January 2010. New complaints are best lodged with the new FOS.

The Financial Ombudsman Service (FOS) is an independent organisation offering free and accessible dispute resolution services to financial services consumers across Australia. It is approved by the Australian Securities and Investments Commission and is also overseen by an independent board of directors. The service is free to consumers and disputes will be handled as fairly and quickly as possible.

When to Contact the Financial Ombudsman Service

The Financial Ombudsman Service should only be contacted after an attempt has been made to resolve any complaints directly with the insurance company. If a complaint remains unresolved customers can then ask that their dispute be dealt with by the company's Internal Dispute Resolution (IDR) process. All participating insurance companies have IDR processes and must provide customers with a final decision in writing within 15 business days of receiving any request to deal with the dispute.

Anyone who is unhappy with the IDR decision can lodge a dispute with the FOS. This can be done by downloading and completing a complaint form on their website, or simply writing to them with details of the complaint. The final decision letter from the financial services provider’s IDR process should also be included.

What the Financial Ombudsman Service Will Do

After the FOS has been contacted they will send out a simple form called a "Referral Notice" to complete which asks for details about the dispute. This Referral Notice must be lodged with FOS within three months of the final decision from the insurance provider. The Referral Notice and any other information provided will be sent to the insurance provider who will then send FOS any information that it considers relevant to the dispute.

After all information is exchanged, a Case Manager will examine the dispute and gather any further information. The Case Manager will then attempt to resolve the dispute between the customer and the insurance provider. If the dispute cannot be resolved at this stage, all the information gathered will be sent to an independent decision-maker who will decide the dispute and give reasons in writing for the decision.

An Adjudicator determines disputes of $5000 or less, and a Referee decides disputes where insurance fraud is alleged. The Panel determines all other disputes. Generally, disputes are dealt with based on the documents provided by both parties but in some cases, particularly where fraud is alleged, the Referee may meet with the customer.

It is not usually necessary for either party to be legally represented when using the Service. Those deciding to use a lawyer or other professional assistance do so at their own cost.

Contact Details for the Financial Services Ombudsman:

The copyright of the article Insurance Disputes in Australia – Who can Help? in Insurance is owned by Jo Jackson. Permission to republish Insurance Disputes in Australia – Who can Help? in print or online must be granted by the author in writing.