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Insurance company managers should be responsible for complaint-handling, EU advisory body says


Senior managers at insurance companies should take "overall regulatory responsibility" for handling complaints, an EU advisory body has said.

In a complaints-handling consultation the European Insurance and Occupational Pensions Authority (EIOPA) said that national authorities responsible for insurance should ensure that insurance companies have a "complaints management policy" in place where senior managers are "responsible for its implementation and for monitoring compliance with it".

EIOPA, an independent advisory body to the European Parliament, Council of Ministers and European Commission issued the consultation alongside draft 'best practices' it has announced for complaint-handling by insurance companies in the EU. Under new regulations introduced alongside the EU's Solvency II Directive, EIOPA was established with the aim of protecting consumers, building trust in financial markets and harmonising rules for EU financial institutions. The Directive sets out new laws on insurance company financing and the supervision of insurance and reinsurance groups.

In its draft 'best practice' proposals EIOPA said insurance companies should establish a "complaints management policy" that is overseen by a senior manager and where "the necessary internal flows of information and reporting lines for complaints management" are organised properly, the group said in its proposals.

A 'best practice' complaints management policy will enable complaints to companies to be made free of charge and by "any reasonable means", including on behalf of individuals by authorised representatives, such as lawyers or another family member, EIOPA said. The complaints policy should also set out the process of complaints handling, including information about deadlines, and ensure those making the complaints are treated fairly, and that their information and personal data is stored in accordance with data protection laws, it said.

Under EU data protection laws personal data must be "processed fairly and lawfully" and be collected for "specified, explicit and legitimate purposes and not further processed in a way incompatible with those purposes". The information must be stored securely and individuals also have a right to request that organisations hand them the personal data they store about them upon request.

Insurance companies should prevent, identify and manage possible conflicts of interest and "prompt, equal, fair and efficient management of complaints," EIOPA said. Staff should be properly trained to deal with complaints and cases should be reported internally, followed-up and monitored to ensure they comply with the firms' policies, it said.

Insurance firms should record what complaints are about, "data on the complainant" and the dates it receives and answers the complaints, EIOPA said. Other information to be recorded should be the outcome of the "complaints-handling procedure" and what class of insurance the complaint refers to, the group said.

Management at the firms should collect data about complaints and try to establish what is causing them and the specific products and services complained about, EIOPA said. They should also establish a process for identifying "root causes" and prioritise dealing with them, it said. A way of reviewing whether the root causes affect "other processes or products" should also be set up, and be able to determine how any corrections to those causes can be achieved, it said.

"Regular reporting to senior personnel where information on recurring or systemic problems may be needed for them to play their part in identifying, measuring, managing and controlling risks of regulatory concern and keeping records of analysis and decisions taken by senior personnel in response to management information on root causes of complaints," EIOPA said in its best practice draft guidance.

EIOPA's separate consultation includes proposed guidance that insurance industry authorities should follow around complaints-handling. The group's consultation said authorities should ensure insurance companies provide regulators and/or ombudsmen with complaints data and that the companies themselves monitor complaints to identify "recurring or systemic problems, and potential legal and operational risks".

Authorities should also ensure insurance companies provide consumers with information about how they handle complaints when the individuals make them and "subsequent means of redress," EIOPA said. The group also advised authorities to make sure insurance companies seek all relevant information about complaints and respond in a timely fashion in accordance with nationally set deadlines in a language that consumers can easily understand.

In the UK major financial institutions, regulators and complaints-handling bodies have been embroiled in the fall-out to thousands of complaints about mis-sold payment protection insurance (PPI).

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