Flaxmans FOS-SOS: A new service is launched
April 1st saw new FOS qualifying rules come into force – were you fooled?
Yes, April 1st did see the new FOS qualifying rules come into force and with it clear and important implications for brokers to understand before recommending the FOS to your clients.
Even just recommending to a customer/client that they seek legal advice or go to the FOS carries with it responsibilities and a duty of care by the broker.
The new FOS qualifying rules give all brokers the opportunity to add value and give protection against criticisms that can lead to claims against the broker rather than the insurer.
There is an increase in the number of claims being rejected by insurance companies and the outsourced claims managers that are now a common part of the industry’s infrastructure.
It is anticipated that the new FOS rules will encourage more businesses and consumers (especially HNW consumers) to seek redress from the FOS rather than pay solicitors to sue the insurers for disputed claims.
The role of the British insurance broker is no longer one common, business model. There are variations according to the class of business conducted and whether the broker is also an underwriting agent; an advisory broker an execution only broker or indeed a partnered agent of the broker’s preferred insurer.
Each of these business models requires the broker to identify its role in the matter of claims.
Some brokers decide not to provide a claims service at all whilst others provide a comprehensive and dedicated claims service. A broker’s customer/ client may not give the broker’s claims service even a passing thought until they have a claim and then, typically, they will assume the broker is their personal adviser.
Beware solicitors might bite the hand that feeds them
In the event of a claim that is rejected, or only partly paid, for example, brokers might simply recommend to their client that they go to a solicitor or send a complaint to the insurers and then use the FOS service.
Solicitors have a choice of recommending the policyholder to sue the insurer or the broker or both. This is the “elephant in the room” in the broking sector and rarely gets attention because the consequences for the unfortunate broker can be so severe.
The new FOS qualifying rules nevertheless give all brokers the opportunity to take control of the potential for a disputed claim and reduce the risks of being embroiled in a matter that costs time, money and reputation.
FLAXMANS New and Unique FOS-SOS Service
In view of the changes Flaxmans has launched a new and dedicated “FOS-SOS” service to policyholders and to brokers (with special terms for BIBA members)
In summary the new service gives YOU the opportunity to transfer to Flaxmans the responsibility of advising your client in the case of a disputed claim.
Visit our dedicated FOS-SOS website for more details of the service and how it operates.
Above all – act sooner rather than later
Every broker wants to show its customer / client that it can deal with their problems. Mostly they can but when it comes to a disputed claim the broker is not best advised to tackle it unless they have particular experience and skill in doing so.
So when that claim comes in – don’t hesitate to call – we are at your service
To be specific: it can be dangerous for a broker that has sold a policy to enter into a dispute with the insurer or their representative as to the meaning of the policy coverage. There are three principal reasons for this:
- The broker may say something that later prejudices their position if the matter does not go well and the broker is called to account for its advice/ actions.
- Brokers cannot interpret the policy wording without potentially compromising what they may have said or implied in the course of the sale of the policy.
- A broker has an agency relationship with the insurer with whom they placed the business. The complexity of the modern relationships is such that conflicts of interest naturally arise. These can prejudice the independent status of the broker in representing the best interests of the policyholder whilst negotiating with the insurer; with whom the broker intends an on-going relationship.
If a claim is disputed take the professional course of action.
Tell your customer/client that you will act in its best interests by recommending an industry-centric service for the professional management of insurance disputes and refer the matter to us.
Typically, we will include the broker in assisting its client but it will be under the auspices of our experienced specialist consultants and so reducing the risk to the broker of putting a foot wrong that cannot later be undone.
We regularly liaise with PI underwriters to reassure them that our methods and experience are designed to and likely to succeed in resolving the problem without the need for litigation.
Our process includes:
- Deciding on what complaint is to be made to the Insurer and how to present it.
- If it’s necessary to go to FOS we will triage the options and explain to the policyholder the pros and cons and implications.
- If it is advisable to seek legal opinion, we have access to dedicated lawyers and counsel.
Our service includes:
- An overview of the dispute together with an opinion as to whether the insurer has treated the business fairly
- An outline of the different routes available for resolution
- An assessment of any impediment to the prospects of success arising out of FOS limits
- How to handle claims that exceed the FOS limits
- A discussion as to whether larger claims are really suitable for an FOS referral
- Identification of claims where the FOS is likely to come to a decision that is more favourable than it would be in a court of law.