FOS Code is a separately operated and funded business unit of the Financial Ombudsman Service (FOS) Australia. We support independent Committees to monitor compliance with codes of practice in the Australian financial services industry to achieve service standards people can trust. Find out more about who we are and what we do.
New General Manager for FOS Code
FOS Code welcomes Sally Davis, who began her new role as FOS Code’s General Manager on 1 September 2015.
Sally brings to the position extensive experience in financial services, as well as good relationships with regulators, industry and consumer groups established during her previous role as Senior Manager of Systemic Issues at FOS. Sally is an accredited mediator and holds a Bachelor of Commerce and a Bachelor of Laws degree from the University of Melbourne and a Graduate Diploma (Arts) from Monash University.
Sally has also been appointed Chief Executive Officer of the Code Compliance Monitoring Committee, which monitors banks’ compliance with the Code of Banking Practice.
Insurance brokers achieve consistent compliance performance
The Australian insurance broking industry continues to achieve consistent levels of Code compliance, according to the Insurance Brokers Code Compliance Committee’s latest annual report, published in October 2015.
Some 342 insurance brokers voluntarily subscribed to the Insurance Brokers Code of Practice in 2014–15, with 126 taking part in the Committee’s compliance program.
Just over a third of participating brokers collectively reported 466 breaches of the Code, which is consistent with breach numbers reported in recent years. Brokers identified most breaches through their quality assurance programs.
“The fact that more than two-thirds of participants reported no Code breaches this year most certainly demonstrates that more work needs to be done to encourage a positive culture of self-reporting that reflects a true position of industry performance,” said Michael Gill, the Committee’s Independent Chairperson.
In addition, 60% of participating brokers collectively reported 321 complaints handled by their internal dispute resolution processes, up 4% from the previous year. Some 64% of complaints were resolved within 21 days and 34% of complaints related to service issues.
The Code aims to build professional competence in the broking profession and increase consumer confidence in insurance brokers – and the role they play in the insurance process. The service standards outlined in the Code also aim to safeguard self-regulation of the industry.
Download the Insurance Brokers Code Compliance Committee’s Annual Report 2014–2015
Code commitment strong in general insurance
Australia’s general insurance industry remains strongly committed to supporting its voluntary code of practice, according to the General Insurance Code Governance Committee’s 2014–15 annual report.
The report details FOS Code’s analysis of compliance with the 2012 General Insurance Code of Practice, which sets standards that general insurers must meet when providing services to their customers. As at 30 June 2015, 50 general insurers and 108 Lloyd’s Australia coverholders and claims administrators subscribed to the Code.
Code Subscribers worked with FOS Code to resolve and close a total of 430 Code breaches in 2014–15, up 61% on 2013–14. Non-compliance with some claims handling standards resulted in 300 of the 430 breaches, including one significant breach. The remaining 130 breaches involved non-compliance with several of the Code’s complaints handling standards.
“Code breach data … tells a consistent story of occasional breakdowns in Code observance, much of which is around timeliness of claims processing and failure to provide correct and full information, including review rights, at the time a consumer’s claim is denied,” said Lynelle Briggs, the Committee’s Independent Chair.
Measures to fix these breaches typically involved training, adjustments to policies and procedures, systems improvements and updated documents.
FOS Code commends Code Subscribers for their positive approach to identifying, self-reporting and remedying breaches of the Code, which demonstrates their willingness to work with the Committee to resolve issues and their strength of commitment to supporting the Code.
From 1 July 2015, Code Subscribers are expected to be fully compliant with the standards of practice and service outlined under a new version of the Code. 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.
Download the Code Governance Committee’s Annual Report 2014–2015
Sharing our experience of Code compliance
Over the past few months, FOS Code has consulted with a range of stakeholders throughout Australia as part of our ongoing work to share our experience of Code compliance and effect positive change in the financial services industry.
In September, FOS Code’s Investigations Manager, Linh Nguyen, attended the Victorian Financial Counsellors Conference, an annual event convened by the Financial and Consumer Rights Council. Linh was one of several community and industry delegates taking part in the conference to understand the challenges currently facing consumers in financial hardship.
“Attending these conferences is about playing an active role within the consumer advocate sector, staying informed, and taking the time to talk directly with professional financial counsellors to understand how we can best support them to help their clients,” said Linh.
Earlier in September, members of the FOS Code team and Insurance Brokers Code Compliance Committee attended the National Insurance Brokers Association (NIBA) Convention held in Melbourne. NIBA is the peak body of the insurance broking profession in Australia and represents an estimated 90% of all insurance brokers in Australia.
“Key themes that emerged during the conference – such as building consumer trust and enhancing professionalism – reinforced the critical importance of the Insurance Brokers Code of Practice for both insurance brokers and their clients,” said FOS Code’s Compliance Manager, Daniela Kirchlinde.
Other key engagement activities for the past quarter included:
- FOS Code’s quarterly bank liaison teleconference on 26 August, where10 banks discussed Code compliance issues with the FOS Code team in an open forum.
- Attendance at the Insurance Council of Australia’s Code Reference Group meeting in Sydney.
- Meetings with the Insurance Council of Australia, Australian Bankers’ Association and Australian Securities and Investments Commission.
- Members of the Customer Owned Banking Code Compliance Committee attended the Customer Owned Banking Association Convention held in Darwin.
- Code General Manager chaired a meeting of all Committee Consumer Representatives in Sydney.