The Professional Insurance Brokers Association (PIBA) is the largest independent representative body for insurance and mortgage brokers with over 850 member firms throughout Ireland. This submission outlines the views of PIBA on behalf of its members in relation to the proposals by the Financial Services Ombudsman including the Publication of Information on Complaints Record of Providers.
Proposal 1: Setting of a de minimis provision
PIBA would agree that a de minimis provision should be put in place. PIBA suggests that 10 upheld/partially upheld findings against an individual firm should be set as the threshold as PIBA would feel that this is indicative of a systematic problem with a particular firm.
Information about the relative market share of the provider will also be given
PIBA feels that the most accurate way to identify market share of the provider is by turnover or premium income generated.
Identify the financial services provider in case reports
PIBA has concerns in relation to this proposal and feel that the introduction of such measures will mean that the Financial Services Ombudsman will be taking on a semi regulatory role. The publication of the name of a firm involved in a complaint particular for smaller entities such as an intermediary can have a very negative effect on their business.
We suggest that it is more appropriate and effective that where a number of complaints have been received against a particular firm that this information is shared with the Central Bank of Ireland. The Central Bank of Ireland can then take measures such as carrying out an inspection on the relevant firm to address any concerns.
If the proposals are to be introduced we would advocate that the naming of the firm would only take place where there are systematic complaints regarding a particular firm.
The last number of years has seen an enormous increase in volume of complaints to the Financial Services Ombudsman. The recently published Financial Services Ombudsman’s annual report outlined the figures for the number of complaints closed pre-investigation.
Source: Annual FSO Report 2010 Pg. 18
It is interesting to note that 2,424 complaints which were received were close due to no further contact from the consumer. This would indicate that these complaints do not carry any merit. Intermediaries are required by their Professional Indemnity providers to report any potential claims so therefore would be required to report any complaints made to the Financial Services Ombudsman. This has a significant impact on intermediary’s premiums if the case has not been closed by the Financial Services Ombudsman prior to the annual renewal.
In order to prevent consumers from making “have a go” complaints which are deemed open cases with the Financial Services Ombudsman and have an affect on intermediaries businesses, we would suggest that an application fee be introduced similar to what is required by the Small Claims Court. We would see that this would act as a deterrent to consumers who do not have genuine cases from making complaints to the Financial Services Ombudsman. It would also reduce administrative burden on the Financial Service Ombudsman office and also generate revenue.