You might be surprised to know that insurance companies typically pay out on the overwhelming majority of claims made in Australia and New Zealand. However, if you are one of the very small percentage who has an insurance claim rejected each year, or if you are unhappy with the amount your insurer has deemed payable for a claim, it’s important that you know that there is a process in place through which you can make a complaint and seek an alternative resolution.
Here is everything you need to know about that process.
In New Zealand, the law requires all financial service providers to be registered on the Financial Services Providers Register and to belong to an approved dispute resolution scheme. There are several schemes, including the Banking Ombudsman Scheme, and the Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) which resolves complaints about insurance and financial services. Virtually all of the insurers which are members of the Insurance Council of New Zealand (ICNZ) and subject to the Fair Insurance Code belong to the IFSO Scheme. In addition, health, life and disability insurers are also Participants in the IFSO Scheme, but are not members of the ICNZ, or subject to the Fair Insurance Code. Like Australia’s FOS, the service is independent, impartial, and free for consumers.
Internal dispute resolution
The IFSO Scheme’s process requires you to make a complaint directly to the insurer as part of their internal dispute resolution process. The IFSO Scheme can help by providing guidance and the relevant forms for making written complaints.
External dispute resolution – IFSO Scheme
If, after going through your insurer’s complaints process, your complaint remains unresolved, this is called “deadlock”. The next step is to make a complaint to the IFSO Scheme if your insurer is a Participant and you can look at our websitewww.ifso.nz to find out this information.
When your complaint has been accepted for investigation by the IFSO Scheme, a case manager will make contact with you. The case manager will apply negotiation, mediation and conciliation skills when investigating complaints. The aim is to reach settlement where possible, which is an agreement between both parties. If settlement cannot be reached, a decision will be made based on the factual information provided by you and your insurer, and expert advice if required.
What if I don’t like the decision the IFSO Scheme comes to?
Both you and your insurer have the right to request a review of any IFSO Scheme decision, if there is relevant new information you want to be considered. If the IFSO makes a Recommendation, the initial decision may or may not change, and you may or may not get the outcome you want. If the outcome is in your favour and the insurer does not accept the IFSO’s Recommendation, the IFSO can make an Award against the Participant which is binding and enforceable in the courts.
However, if you remain unhappy with the IFSO’s recommendation, and you have not entered into any settlement agreement, you may take your complaint to any other alternative dispute resolution process or to Court. None of your legal rights are compromised by making a complaint to the IFSO Scheme and it costs you nothing to do so.
Where can I find more information?
For information on making a complaint to your insurer in New Zealand or to the IFSO Scheme, visit their website at www.ifso.nz.