Disputes lodged with the Financial Ombudsman Service (FOS) reached a record level after increasing by 16% over the past 12 months but disputes regarding life insurance remain relatively low.
FOS stated it received 39,479 disputes in the last financial year, up from 34,095 in 2016, driven by a continued growth in general insurance disputes.
Of the disputes received 22,475 were accepted and of those only 4%, or 1,018 disputes, were related to life insurance, a decrease of 7% on the previous year’s number of 1,095 disputes.
The Service released the statistics as part of its Annual Review, which also shows that life insurance advice related disputes have continued to remain low accounting for less than 10% of life insurance related disputes.
FOS separated life insurance disputes into income stream and non-income stream products and then further sorted the disputes into sales and service channels.
“Financial Service Providers gave insufficient warning before ceasing benefits, did not provide enough explanation…or requested too much or irrelevant information…”
The service said that for the 533 disputes for income stream products, life insurance advice related disputes accounted for only 7%, or 37, of all disputes, while complaints about life insurers accounted for 71%, or 378, of all disputes.
For the 424 disputes received about non-income stream products, complaints about financial advice accounted for 8%, or 34, of all disputes while complaints about life insurers accounted for 68%, or 288, of all disputes.
The low-levels of advice related disputes reflects previous reports released by FOS which also reported low levels of complaints with advisers compared with higher levels of complaints with life insurers (see: Risk Advice Source of Few Complaints).
FOS also stated that the most common source of complaint in the income stream product area was income protection insurance which was the cause of 92% of disputes with a denial of claim, delays in claim handling and claim amounts being the most common complaints.
“Common issues in income protection disputes were that Financial Service Providers (FSP) gave insufficient warning before ceasing benefits, did not provide enough explanation about why benefits would cease or requested too much or irrelevant information of beneficiaries before making a claims decision,” the Review stated.
More than half of the complaints in the non-income stream area related to a decision made by a FSP where disputes were spread across term life (35%), TPD (25%) and trauma (28%) product channels, with denial of claims and claims handling delays being the most common reason people lodged disputes.
so advice related, insurance complaints are 71 out of 39,479, yet ASIC continually try targeting Financial Planners/Risk Advisers, and take a sledgehammer to the industry.
My quick calculation and forgive me if I am wrong, shows that 99.6% of complaints had nothing to do with the advice that Life Advisers gave.
This equates to .4 of 1% of the thousands of advisers, who provided hundreds of thousands of pieces of advice around Life Insurance over the years, which has led to a witch hunt, was based on lies.
The obvious focus of an investigation, should be based upon and prioritised against the perpetrators of the majority of complaints.
Instead, we saw a master magician called the FSC, pull a rabbit out of it’s hat and the poor bunny were Life advisers, which was the perfect distraction from the real culprits and as usual, the Government fell hook line and sinker for the fairy tale and chose to pursue and adopt a strategy and bring into Parliament, regulations based on the complete opposite of the truth, that was continually published and brought to their attention, yet ignored.
So only 50 advisers were found to be churners, and bugger all FOS complaints were relating to life insurers and life advisers. And so we advisers were pillared and punitively punished. My god. This has to be overturned. It is all a falsehood and a scam. What do you think AFA and FPA ?
At the risk of sounding naïve, can anyone explain to me why these figures haven’t found their way to the FSC, AFA, FPA, ASIC and the government? Do any of these institutions have the ability to study the facts and the guts to admit that risk advisers have been so badly treated? It will be interesting to see where things are up to in a few years when ASIC conduct their post LIF review? I wonder if they will take into account ALL facts?
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