32 national competent authorities (EEA plus Gibraltar), including the Central Bank of Ireland, have confirmed their compliance or intention to comply with the EIOPA’s complaints-handling guidelines for insurers.
These guidelines came into effect in 2012. Principally, the guidelines require insurers to inform policyholders of the arrangements for handling complaints relating to insurance contracts, including the existence of a complaints body, where appropriate. In Ireland, this is the Financial Services Ombudsman.
The guidelines apply to the Central Bank as the Irish authority responsible for supervising complaints-handling by insurers. The Central Bank’s response (on EIOPA’s website) serves as useful reminder to life and non-life insurers conducting business in Ireland of the myriad requirements of the Consumer Protection Code (CPC) relating to complaints. It addresses each of the 7 high-level principles contained in the EIOPA guidelines and the corresponding CPC provisions. For example, in respect of the guideline to ensure that insurers have a complaints-management policy in place, the Central Bank’s response notes the following CPC requirements:
- Written procedure for the proper handling of complaints
- Escalation of trend analysis of consumer complaints to the insurer’s compliance/risk function and senior management
- Inclusion of summary of the complaints procedure in the terms of business document
- Complaints procedure must be a written document
- The insurer must effectively employ resources, policies and procedures, systems and control checks, including compliance checks and staff training
The Central Bank’s response to EIOPA also highlighted its intention to introduce a bi-annual obligation on certain insurance companies to report on levels of complaints. The Central Bank expects that this reporting obligation will apply to all domestic retail insurance companies during 2014.
In line with its intention to create a “circle of protection” for consumers, EIOPA also recently held a public consultation on draft guidelines for complaints-handling by insurance intermediaries. The draft guidelines, which should be finalised in Q3 2013, are similar in scope to the guidelines on complaints-handling by insurers. The draft guidelines aim to establish a minimum level of supervisory harmonisation and contain high-level principles for regulators regarding internal systems and controls for complaints-handling, required information and communication with complainants. The draft guidelines seek to take into account the diverse range of insurance distribution channels and take a proportionate approach to ensure the benefit to consumers outweighs costs to regulators and intermediaries.