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Change of approach due to increase in Investments, Life Insurance & Superannuation disputes numbers

In the twelve months to 30 June 2009, the Investments, Life Insurance & Superannuation group received a 77% increase in disputes. A significant number of these are likely to require Panel or Adjudicator determination. This level of disputes is continuing in the second half of 2009. We anticipate a further 50% increase in the referral of matters for a decision by a Panel or Adjudicator in the 12 months from 1 July 2009. To date, the bulk of the increased dispute numbers has been in financial planning disputes.

Disputes that we receive after 1 January 2010 will be handled in accordance with the new Financial Ombudsman Service Terms of Reference which is currently with ASIC for approval.

In the interim, while recruiting and training additional case workers, the Investments, Life Insurance & Superannuation group has been reviewing its dispute-handling processes and procedures to identify more efficient ways of bringing disputes to an earlier resolution, without compromising the integrity of our processes, particularly our obligation to provide procedural fairness to the parties.

Some of the strategies adopted to manage the very significant increase in workload are:

  • before disputes are investigated, members are provided an additional opportunity to resolve matters
 

    directly with consumers;

  • the review of our processes for identifying disputes that are potentially frivolous, vexatious or lacking in substance (see below for more information on this);
  • case meetings with members with significant dispute numbers to identify matters suitable for early resolution or to identify missing documentation to avoid delay in determination;
  • the fast-tracking of appropriate disputes to the Panel or Adjudicator;
  • a truncated information exchange process during Panel investigation;
  • the early identification of the date when the Panel or Adjudicator will determine the dispute, with parties being held to the timelines established to meet that date; and
  • the publication of articles on a range of typical financial planning disputes, to assist members in this sector to understand the approach that we are likely to take in investigating and determining such disputes, and therefore to assist members to respond appropriately to these disputes. (The first such article, on margin loans, is included in this Circular.)

Practice Note 2 has been revised to reflect the change of approach to disputes handling (see article below).

 

Revised Practice Note 2: Dispute Handling Processes
and Information Exchange

Investments, Life Insurance & Superannuation Practice Note No 2 PN2 Dispute Handling Processes and Information Exchange has been revised to reflect the intended approach to handling the very significant increase in dispute numbers. (Please note that Practice Note 2 was previously entitled Practice Note 2 PN2 Information Exchange and Case Summaries.)

View/download revised Practice Note 2

 

Disputes handling

Disputes received before 1 January 2010

The revised procedures discussed in Practice Note 2 apply to all disputes received by the Investments, Life Insurance & Superannuation group before 1 January 2010. We will continue to handle those disputes in accordance with the current Investments, Life Insurance & Superannuation Terms of Reference and Practice Note 2 until those disputes are concluded, by either settlement or determination, even after 1 January 2010. 

Disputes received after 1 January 2010

All disputes received after 1 January 2010 will be handled in accordance with the Financial Ombudsman Service Terms of Reference, as approved by ASIC.

At present, we are consulting with stakeholders regarding Operational Guidelines for the Terms of Reference.  The

 

processes and procedures that will be used to handle all disputes lodged after 1 January 2010 will be in accordance with the Financial Ombudsman Service Terms of Reference and its Operational Guidelines.

So for a period, the Investments, Life Insurance & Superannuation group will be handling disputes under two different Terms of References and processes, with pre-1 January disputes handled under the current Investments, Life Insurance & Superannuation Terms of Reference and Practice Note 2, and all new disputes handled under the processes and procedures which are to be developed in accordance with the Financial Ombudsman Service Terms of Reference and its Operational Guidelines.

 

Further information

If you have any queries regarding the revision to our current processes, please contact the case manager who is currently handling your file, or:

  • Michael Ridgway, Conciliation Manager – for queries regarding the revised case management and the conciliation process on (03) 8623 2007;
  • Fran Bolger, Manager Panel Case Team – for queries regarding Panel Case Management or Panel and Adjudicator processes on (03) 8623 2038.