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Changes to and implications of the Complaint Handling Regime

A straightforward and effective complaint handling process is pivotal to any firm’s policy on conduct and treating customers fairly. Despite this fact, the insurance industry has struggled to offer and is often accused of having a less than positive reputation by its customers.

Following on from the FCA feedback last summer changes introduced this June have attempted to address this disconnect, it is not known if these changes still in their infancy will have any real impact.

The recent amendments are set out below:

  • Extending the ‘next business day rule’ to three business days;
  • Removing the reportable and non-reportable differentiation and;
  • Introducing the concept of the ‘summary resolution’.

The FCA are keen to change the behaviours and practices within the industry, setting clear expectations and response times for customers and in its recent report of 17th of June 2016, has set out two specific areas where the industry can improve the way they manage complaints.

The FCA defines complaints as "any local or written expression of dissatisfaction, whether justified or not, from, or on behalf of a person about the provision of, or the failure to provide a service.”

So were surprised to find that so called “ expressions of dissatisfaction ” were often considered to be less serious than complaints “proper” and were often not even treated as a complaint.

As firms struggle to educate their businesses how to recognise a complaint the FCA recommend that expressions of dissatisfaction are recorded internally in the same way as complaints and so get treated in the same way.

Secondly, the FCA stressed that the level of detail used when conducting a compliant root cause analysis is key when identifying, reviewing and updating business policy and process, and therefore correct data capture and analysis is critical if complaints are to be recognised and handled appropriately.

Having said all of this, the change to the rules is in our view focuses correctly and aim to improve the ultimate outcome and the information available which is made available to the ultimate customer. Proper root cause analysis, analysis of complaints and escalation resulting in business improvement will mean those businesses that look after their customers will be best placed to succeed in an evercompetitive market.

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David Coupe, Senior Partner at EC3 Legal, said of the union: “The focus of EC3 Legal has always been on serving our clients' businesses. Following the merger with Birketts, I am confident that our clients will continue to be the biggest beneficiaries, as the two practices will be able to expand and develop the range of services on offer to new and existing clients.”


Posted 1 May 2020

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