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Issue 22 - July 2015

An update from the Code Compliance and Monitoring Team


Senior leadership changes

Dr June Smith has resigned from her role as CEO of the Code Compliance Monitoring Committee and General Manager of Code Compliance and Monitoring to take up her appointment as Lead Ombudsman (Investments and Advice) at FOS.

Over the past four years, June has made an outstanding contribution in developing the role of codes of practice to improve customer service. The FOS Code team wishes her every success in her new position. An announcement regarding June’s successor will be made shortly.

In other staff changes, FOS Code’s Investigations Manager Ralph Haller-Trost has taken a year’s leave of absence, returning to FOS Code in August 2016. In his absence, the role will be filled by Linh Nguyen, who joined FOS Code in 2014 as a compliance analyst.

Transition deadline for 2014 General Insurance Code of Practice

From 1 July 2015, companies that subscribe to the 2014 General Insurance Code of Practice are expected to be fully compliant with the Code’s standards of practice and service.

The 2014 Code – owned and published by the Insurance Council of Australia – came into effect on 1 July last year, with a 12-month transition period for code subscribers.

Throughout this period, FOS Code worked closely with code subscribers to help them understand and interpret their new code obligations, and to adapt their internal monitoring and compliance frameworks to accommodate the revised Code’s provisions. We offered support through our stakeholder forums, teleconferences and onsite visits as well as through a range of guides and checklists produced specifically to support transition.

Key changes under the 2014 Code include:

  • a focus on consumers of retail insurance products
  • enhanced standards for consumers experiencing financial hardship
  • extending the Code’s application to third party beneficiaries of insurance policies
  • greater emphasis on promoting the Code, and
  • a revised framework for Code governance, monitoring, enforcement and sanctions.

Currently, 157 companies voluntarily subscribe to the 2014 Code, consisting of 49 General Insurers and 108 Lloyd’s Australia Limited Coverholders and Claims Administrators. FOS Code will assess their compliance with the 2014 Code later this year through our annual compliance monitoring program.


New online portal

We have launched an online portal to streamline and enhance communication between FOS Code and code subscribers.

Our portal offers code subscribers a secure method for lodging their annual compliance statements and other data using the Financial Ombudsman Service’s (FOS) Secure Services website. Previously compliance information was collected via questionnaires emailed to subscribers.

“Digital data collection will deliver significant efficiencies,” says Compliance Manager Robert McGregor. “The portal will make it easier for our compliance analysts to extract and analyse data, while streamlining the data submission process for code subscribers.”

Subscribers to the general insurance, insurance broking, banking and customer owned banking codes are all set to benefit from the new portal over the coming months.


Financial difficulty inquiry (banking)

An inquiry is underway to determine how effectively code-subscribing banks are providing assistance to customers who are experiencing financial difficulty.

The Code Compliance Monitoring Committee (CCMC) is conducting the inquiry in response to changes to the Code of Banking Practice, which was revised in 2014 to include strengthened financial difficulty obligations. These obligations state a bank must try to help customers if they are unable to meet their repayments under a credit facility they hold with the bank, such as a credit card, personal loan, home loan or business facility.

The Committee is assessing banks’ compliance with the enhanced code standards as financial difficulty remains one of the most significant and sensitive areas of engagement between banks and their customers, according to the Committee’s stakeholders. External dispute resolution schemes, including FOS, also continue to receive high volumes of disputes relating to financial difficulty.

As part of the inquiry, 13 banking groups have completed a questionnaire detailing their processes for helping customers overcome financial difficulty. In addition, 75 consumer and small business representatives have documented their experiences dealing with banks on behalf of their customers.

The FOS Code team has also visited 44 bank branches and audited bank websites to assess customers’ access to information on financial difficulty assistance.

A summary of findings and subsequent recommendations to industry will be published in September at