In a submission to the Independent Review of FOS conducted by Cameronralph Navigator, the ICA said FOS needed to deal with disputes more efficiently, develop clear, consistent guidelines around the principles of fairness and review data before releasing it to the public to eliminate confusion.
The ICA submission said that once a dispute is before FOS, insurers are forced to submit information within a short time period. However, it can be months before FOS undertakes any action towards a case.
The ICA also argued that information from applicants to FOS can also take months to be passed on to the relevant insurer, who will then be required to respond within a week.
ICA executive director and CEO Robert Whelan said this has a flow-on cost effect for insurers, as the insurer may have to pay interest if the applicant is successful, even though the delay was caused by FOS.
Mr Whelan said case managers also allow applicants to make multiple submissions and give new information at every stage until the determination is issued, and often without any notice to the relevant insurer. With every new submission from an applicant, the FOS case manager must review the case again and the insurer must again respond within a short period.
Mr Whelan said these types of issues could be addressed by case managers requesting that applicants submit all information in one or two submissions shortly after the initial application, which would provide insurers with a “reasonable amount of time to respond”.
He also said invoicing was a concern, as the current system, unlike the previous one, does not allow insurers to check particular fees against particular determinations.
“Insurers would like to see a return to the original, more efficient accounting practice,” said Mr Whelan.
He said consistency was another challenge in regard to FOS.
“Consistency issues are arising in the way in which cases are being handled, the way in which the law is applied to determinations, the application of the principle of “fairness” and the application of prior FOS determinations themselves,” he said.
The ICA feels there needs to be a greater understanding of good industry practice, better consultation with insurers and a less subjective resolution of disputes.
“For the sake of consistency and clarity, and to aid in the preparation of submissions, it would be useful if FOS developed guidelines around the principles of ‘fairness’,” said Mr Whelan.
ICA also argued that the comparative tables released by FOS were “overwhelming and extremely difficult to understand”, and therefore of little use for the public.
“FOS could review the data it collects and engage with stakeholders to determine what data sets could be usefully provided,” said Mr Whelan.
