HANDLING COMPLIANTS MANAGEMENT IN MOTOR INSURANCE

By Sara Landini

WHY IS IMPORTANT TO MANAGE COMPLAINTS?

HANDLING COMPLAINTS MANAGEMENT

Complaints Claims

IMPORTANCE OF H.C.M. IN MOTOR INSURANCE SECTOR

 

Motor insurance premiums are increasing rapidly in all European countries because of the growth of the number of personal injury claims arising from road traffic accidents.

The high cost of motor insurance can cause a number of policy problems for Governments to deal with, and particularly: it encourages some people to drive without insurance, it increases the incidence of insurance fraud, and it adversely affects the lives of people and the freedom of movement.

WHAT ABOUT EIOPA GUIDELINES?

Guidelines on Complaints-Handling by Insurance

Undertakings

On June 2012 Eiopa issued a document on Complainants

Management Guidelines taking into account the Recital 16

and Articles 41, 46, 183 and 185 of Directive 2009/138/EC of

the European Parliament and the Council of 25 November

2009 on pursuit of the business of Insurance and Reinsurance

(“Solvency II”)2.

Eiopa Guidelines provide for the following:

“The main objective of insurance and reinsurance regulation and supervision is the adequate protection of policyholders and beneficiaries …..”

“Insurance and reinsurance undertakings shall have in place an effective internal control system.”

That system shall at least include :

administrative procedures

accounting procedures

internal control framework

appropriate reporting arrangements at all levels of the undertaking

a compliance function

Competent Authorities should ensure that insurance

undertakings have a complaints management function, which

enables complaints to be investigated fairly and possible

conflicts of interest to be identified and mitigated.

Competent authorities should ensure that insurance undertakings provide information on complaints and complaints handling to the competent national authorities or ombudsman. This data should cover the number of complaints received, differentiated according to their national criteria or own criteria, where relevant.

Competent authorities should ensure that insurance undertakings analyze complaints handling data, to ensure that they identify and address any recurring or systemic problems, and potential legal and operational risks.

Guidelines on Complaints-Handling by Insurance Intermediaries

On Third dicember 2013, EIOPA has adopted the new “Guidelines on complaints handling by insurance intermediaries”. Together with the guidelines on complaints handling by insurance undertakings, the two sets of guidelines should ensure a ‘complete circle of protection’ for consumers, while taking into account the wide variety of intermediaries, (many of which are ’one man bands’) with a proportional approach.

These Guidelines do not apply where: (i) an insurance intermediary receives a complaint about activities other than those regulated by the “competent authorities” pursuant to Article 4(2), EIOPA Regulation; (ii) an insurance intermediary handles a complaint on behalf of another financial institution under the legal provisions applicable to that institution.

In any case, where the Guidelines do not apply for the reasons, the intermediary should respond, where possible, explaining why he/she is not the right person to complain to.

Also insurance intermediaries need to have a complaints management function which enables complaints to be investigated fairly and, with the exception of insurance intermediaries which are sole traders, possible conflicts of interest to be identified and mitigated.

Competent authorities should ensure that also insurance intermediaries:register, internally, complaints; provide information about complaints to the competent Authority; have an Internal follow-up of complaints-handling.

BULDING A CORPORATE GOVERNANCE COMPLAINT WITH EIOPA GUIDELINES

Analyzing the causes of individual complaints

Considering whether such

causes may also affect other processes or

products

Correcting, where reasonable to do so,

such causes

Complaints management

function

Writing conducts code

Comunicate to both

Autority and Customers

A dedicated complaints

management FUNCTION

Inclusion of complaints

management function in other

operating department ????

Esternalizing the Complaints Management

Function

Possible

solutionsOperating

departments

New Duties for Insurance Undertakings and Insurance Intermediaries:

1- Defintion of a new internal policy for claims management

2- Institution of a dedicated Claims Management Function

3- Claims registration

4- Reporting to Authority

5- Internal follow up of complaints handling:analysis of claims, problems in order to find solutions and to implement procedures

6- Comunication to customers

7- Definition of a claims management procedure ordered to the following criteria: certainty of collected information regar to each case, clarity of responses, answers in time.

Eiopa One Minute

Eiopa Guidelines

Complaints management policy needs to be implemented having regard to:

- the minimum standards set down in national legislation and the guidelines;

- the size and nature of their business.

The approach that insurance undertakings (or insurance intermediaries) take when developing a complaints management function will differ depending on the size and complexity of their business. This function might be, for example, a separate department, unit or a single senior individual. The key aim is to ensure that there are organizational arrangements in place that enable complaints to be investigated fairly and allow possible conflicts of interest to be mitigated. (see EIOPA BoS2/091 28 September 2012 )

The approach that insurance undertakings take when developing a registration procedure is the following:

Insurance undertakings should register complaints internally in the manner that seems best suited to the volume of complaints they receive.

This could be done electronically and must be secure.

The approach that insurance undertakings (or insurance intermediaries) take when developing a registration procedure is the following:

Insurance undertakings will need to provide complaints data on the complaints they receive to their national authorities and/or their national ombudsman.

The approach that insurance undertakings (or insurance intermediaries) take when developing an internal follow up of complaints handling is the following. We would expect small businesses to have in place on going processes to: - analyse the causes of different types of complaints; - consider whether these causes affect other products or processes; - correct these causes, where reasonable to do so.

Having regard to the information to customers, written information on the complaints handling process should: - be provided either on request or on

acknowledgement of a complaint;

- be published in an easily accessible manner;

- set out how to complain and the processes the insurance undertaking (or insurance intermediaries) has in place for dealing with a complaint.

The written information could, for example, be on the insurance undertaking’s website, but could also be as a brochure, pamphlet or in the contract. But it must be clear, accurate and up to date.

Having regard to the procedure of claims definition, when investigating a complaint, the insurance undertaking (or insurance intermediaries) should, irrespective of its size:

- gather and investigate all relevant evidence;

- communicate in plain language, which is clearly understood;

….

- provide a response without unnecessary delay or at least within the time limits set at national level; and, if this is not possible, inform the complainant about the causes of delay and set out when the investigation is likely to be completed;

- in the undertaking’s final response, set out its position and the complainant’s option to maintain the complaint (e.g. by referring to an ombudsman, other alternative dispute resolution mechanism etc.).

- the final response should be in writing, where national rules require

WRITING CONDUCTS CODES – CREATING AN INTERNAL CLAIMS MANAGEMENT POLICY

Complaints Handling Management's responsibility begins

with the preparation of written policies and procedures for

speedy and fair complaint resolution. These policies and

procedures should be put in writing (so called conducts

code CC) and communicated to all appropriate

departments, emphasizing the accountability of individual

employees to resolve complaints courteously and fairly.

The Complaints Handling Management department of a company should regularly review and, when necessary, find ways to improve complaint-management procedures, paying particular attention to refining communication and coordination between the complaint-management and operating departments

The Complaints Handling Management department of a

company should regularly :

1-review complaint-management procedures and CC

2-when necessary find ways to improve procedures

3-particular attention to refining communication and

coordination between the complaint-management and operating

departments

Making rules to meet high quality standards is part

of the customer satisfaction process.

Companies practice business ethics by adopting

codes of conduct (or ethic codes).

It is important to create good relationships with

business partners, both suppliers and customers,

in order to benefit from fair business together and

to ensure customer satisfaction through:

high quality products,

good pricing,

on-time delivery and ..

excellent service.

CLAIMS PREVENTIO

N

Companies ask their consumers for feedback about their products, services, slogans, logos, etc. They ask questions verbally or in questionnaire form.As with any other branch of science, a rigorous approach needs to be taken in designing and executing questionnaire studies.The results of customer satisfaction questionnaires have been used also to formulate and implement business conduct codes.

Of course, all directors, officers and employees must respect and obey applicable laws and regulations. Conduct codes are just a particular type of policy statement. It is a set of principles of conduct within an organization that guide decision-making. Usually these codes are binding on directors, officers and employees. In case of violations, sanctions will be applied by the organization itself.

We hope that insurance undertakings, as

other enterprises, understand that the

organization an efficient complaint

management policy it is not only a duty but

also an opportunity. Satisfying customers is the foundation of

any successful organisation. Moreover, the

creation of a dialog between the insurance

undertaking or the insurance intermediaries

and their customers can represent a way to

reduce conflicts and, consequently,

insurance costs.

Thanks for your attention!