ASIC has issued revised Regulatory Guide 165 Licensing: internal and external dispute resolution (RG 165) and Regulatory Guide 139 Approval and oversight of external dispute resolution schemes (RG 139) under the Corporations Act and National Credit Act.
RG 165 has been revised with a view to assisting financial institutions to settle simple disputes internally with customers.
RG 165 also provides coverage of internal dispute resolution (IDR) and external dispute resolution (EDR) procedures for customers who have loans from bodies which make or buy loans or leases, and repackage and sell them to investors (securitisation).
The guidance issued applies to financial services licensees (AFSLs), credit licensees (ACLs), and some other financial services providers.
The changes simplify the IDR process by not requiring a ‘final response’ when a complaint is resolved to the customer’s complete satisfaction by the end of the fifth business day after the complaint is received, and where the customer hasn’t requested a response in writing: RG 165.94. The exceptions to this are complaints relating to hardship, a declined insurance claim, or the value of an insurance claim – all of which will still require a final response.
When the complaint is not resolved to the customer’s complete satisfaction within five business days customers must still be sent a written response (including EDR details in case they want to take it further).
For those licensees for whom the new guidance is a heightening of standards, ASIC expects them to comply with the new standards as soon as practicable.
ASIC has announced that the Insurance Council of Australia (ICA) will consult with ASIC and consumer stakeholders on a proposal to amend the General Insurance Code of Practice in relation to situations where insurance customers often phone the insurer to discuss a potential claim before lodging a claim.. The amendment would require insurers to ask customers verbally if they want to lodge a formal claim in situations where customers make enquiries about whether they have the necessary cover. The aim is to make the proposed change without waiting for the next formal review of the Code in 2013.
In the meantime, ASIC anticipates insurers will follow this approach as soon as possible.
