The Australian insurance industry has formally completed its transition from the Financial Ombudsman Service (FOS) to the new Australian Financial Complaints Authority (AFCA), which will now handle external dispute resolution.
“The industry believes the establishment of AFCA from the mergers of FOS, the Superannuation Complaints Tribunal and the Credit and Investments Ombudsman should be a win for consumers and small businesses that experience financial sector disputes,” said Rob Whelan, Chief Executive Officer (CEO) of the Insurance Council of Australia (ICA).
“The ICA’s 52 member companies have been preparing for the new streamlined dispute resolution service for almost a year and have changed their systems, forms and advisory information. Staff have also been briefed on this significant alteration to the dispute resolution process,” Whelan added.
“Importantly, AFCA has also taken over the provision of support to the Code Governance Committee, the independent body that monitors and enforces insurers’ compliance with the General Insurance Code of Practice. This ensures continuity.”
AFCA has broader jurisdiction than FOS in several areas, with limits for disputes capped at AUD $1 million (from $500,000) and compensation capped at $500,000 (from $325,000).
The uninsured third-party motor vehicle compensation cap has also been raised from $5000 to $15,000, and from $174,000 to $250,000 for broker disputes.
AFCA’s service delivery, efficiency and performance will be subject to a formal review in 18 months’ time, Whelan said.
