General Insurance – Complaints Handling

Supervision work undertaken by the FCA in recent months has revealed that some GI firms are failing to consistently deliver fair outcomes for their customers when handling complaints. 

The FCA’s definition of a complaint is:

“A complaint is any oral or written expression of dissatisfaction, (whether justified or not) from, or on behalf of, a person about the provision of (or failure to provide) a financial service or a redress determination, which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.”

You should also note that, even if the business was written prior to the date when FCA regulation started, it is normally still eligible to be treated under the FCA rules if the complaint occurs after that date.

The FCA has identified a number of areas requiring improvement, including:

  • Identifying and dealing with complaints as required
    Firms must apply the FCA definition of a complaint correctly. Some firms are dealing with complaints in breach of DISP requirements, without issuing a summary resolution or a final response letter. This may prevent customers from accessing the formal complaint process – for example, the complaints time-limit rules, fair and prompt assessment of the complaint, and Ombudsman referral rights. And the complaint returns provided to the FCA will not be accurate.
  • Dealing with complaints comprehensively
    Firms should be capturing and addressing all elements of each complaint.
  • Investigation of complaints
    Complaints must be investigated competently, diligently and impartially.
  • Final response letters
    Some firms need to improve the quality of final response letters issued to customers.
  • Identifying the root cause and appropriate remedial action
    Ensure the root causes of complaints are always captured. The action required to correct the root cause, action owners and dates for completion must be clear.
  • Outsourced complaints handling
    Firms that outsource complaints should take steps to ensure that their complaints processes are embedded by their outsourcers. They should have effective oversight of the quality of their outsourcers’ complaint handling, and management information to support this.

The FCA intends to continue to monitor firms’ compliance with the regulations as part of its ongoing supervisory work, and they have confirmed they will take action with individual firms where necessary.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

General insurance firms need to ensure the way they deal with complaints is in line with FCA rules and principles.

Action Required By You

  • Firms should review their complaints handling process against the rules and the FCA’s recent findings;
  • Ensure you have robust systems and procedures in place;
  • Contact your usual ATEB Consultant if you have any queries, or contact ATEB.
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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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