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>> Heading: Understand Insurance >> Shane: I’m Shane Tregillis, the Chief
Ombudsman at the Financial Ombudsman Service.
I strongly believe that improving the financial literacy of Australian consumers about financial
products or services, including general insurance, is an important community goal.
And I am pleased the insurance industry is actively contributing to these financial literacy
efforts through its Understand Insurance campaign and website.
We all use financial products, general insurance to protect our homes, our cars, travel plans
and valuables, or other financial products and services to help buy other goods and services,
save or invest. However, many people do not know much about financial matters, find dealing
with financial institutions complicated, and understanding financial products difficult.
[1st Minute] Shane: The material on the Understand Insurance
website is intended to help consumers make better informed decisions when considering
and purchasing insurance.
So where does the Financial Ombudsman Service fit in? We provide fair and independent dispute
resolution between customers and financial service providers, in this case insurance
companies. It’s free for insurance customers and any decision the Ombudsman makes is binding
on the insurer.
The Financial Ombudsman Service is an alternative to going to court. You don’t have to seek
legal advice, you just come and speak to us. If you have a dispute, your first step is
to lodge a complaint with the insurer, and ask to have the issue reassessed. This is
called Internal Dispute Resolution and there are strict time lines in the law and under
the General Insurance Code of Practice for handling these matters.
[2nd Minute]
Shane: If this process does not resolve the complaint to your satisfaction then you have
the right to bring the dispute to us. If it’s within our jurisdiction, we investigate the
dispute, collect the facts and then seek to use negotiation or conciliation to resolve
it. If your dispute cannot be resolved by negotiation,
we can make a recommendation or a determination. This is a final decision that is binding on
the insurer. However, most disputes are resolved by agreement.
FOS also plays a separate but important role in monitoring whether insurers are complying
with the General Insurance Code of Practice. Last year, we handled more than 10,000 general
insurance disputes, of which around 10 per cent resulted from the natural disasters in
2011.
Complaints about general insurance issues range from the size of payouts to disputes
about rejected claims. About half of these were determined in favour of consumers.
[3rd Minute] Shane: We consider it very important that
general insurance companies continue to actively engage with the customers to reduce the number
of insurance disputes coming to FOS. And we promote this engagement.
Having said that, only a small fraction of the total claims handled every year by insurance
companies results in a dispute that requires our involvement.
I encourage you to explore the Understand Insurance website and other financial literacy
resources now available so that you can become better informed before you can make your insurance
and other financial product decisions.
For more information on the Financial Ombudsman Service, please visit our website www.fos.org.au