The general insurance industry has made a smooth transition to Australian Financial Complaints Authority (AFCA), which formally commenced operations this week, according to the peak industry body.
The one-stop-shop for financial-sector disputes replaced the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO), and the Superannuation Complaints Tribunal (SCT).
Rob Whelan, CEO of the Insurance Council of Australia (ICA), said ICA members signed up to AFCA by the September 24 deadline.
“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,” said Rob Whelan, Insurance Council of Australia CEO. “Staff have also been briefed on this significant alteration to the dispute-resolution process. 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.”
Whelan said the new EDR scheme had broader jurisdiction than FOS in several areas, with limits for disputes capped at $1 million, from $500,000, and compensation capped at $500,000, from $325,000. The uninsured third-party motor-vehicle compensation cap has also increased from $5,000 to $15,000, while the compensation cap for broker disputes rose from $174,000 to $250,000.
The definition of small business has also been altered to refer to any business with fewer than 100 employees.
Whelan said the insurance industry would closely monitor AFCA’s service delivery, efficiency, and performance and would prepare a submission for a formal review expected in 18 months.