On 27 November 2013, the European Insurance and Occupation Pensions Authority (EIOPA) published “comply or explain” guidelines on complaints- handling by insurance intermediaries (IIMs) (the IIM Guidelines), together with a best practices report. Their purpose is to contribute to “enhancing customer protection” as described in the underlying statutory objectives of EIOPA.
The publication of these IIM Guidelines follows a similar exercise conducted by EIOPA for insurers in 2012.
The IIM Guidelines are so closely aligned with the UK’s existing regime that we anticipate that the FCA will decide to comply in full, and require insurance intermediary firms to do the same.
The IIM Guidelines outline eight key requirements:
- ensure the right institute deals with the complaint;
- have a compliant complaints management policy;
- have a complaints management function which enables complaints to be investigated fairly and possible conflicts of interest identified and mitigated;
- maintain a register of complaints;
- ensure that appropriate reports are made to the appropriate regulator (in the UK, the FCA);
- continuously review own complaints handling data and procedure: IIMs should analyse complaints-handling data on an on-going basis in order to identify and address any recurring problems and potential legal and operational risks such as root causes common to types of complaints, their effects on other products and processes and rectification where reasonable.
- provide clear written about complaints handling procedures; and
- ensure that procedures for responding to complaints are suitable and are followed
The IIM Guidance indicates that if IIMs comply with the first requirement, they do not need to comply with the remaining seven.
Complaints received about activities other than those regulated by the FCA will be exempt from the IIM Guidelines. When applying the IIM Guidelines, best efforts should be made to take into account the nature and size of the IIM in light of the principles of proportionality.
We do not anticipate that UK insurance intermediaries firms will struggle to comply with the above deadlines, as the guidelines appear to be reasonable and in many cases, firms already operate to similar standards.
What is good to see, from a consistency point of view, is that, with the logical exception of the first of the above IIM Guidelines, the guidelines for insurers and for insurance intermediaries are substantively identical.