FPA wants limitations on insurer ‘advice’

The Financial Planning Association (FPA) wants it made clear that insurance companies and their representatives cannot provide personal financial advice at claim time.

In a submission responding to the Federal Treasury’s exposure draft legislation covering insurance claims handling as a financial service, the FPA had sought to clearly delineate the roles of financial advisers who help clients in making insurance claims and the representatives of insurance companies.

In doing so, its submission said that “insurer’s representatives should be prohibited from providing personal advice about the claim”.

Related News:

“This should include an explicit ban from providing recommendations or opinions about the claim to the claimant, including whether the claim should, in the first instance make a claim, or accept or decline the insurer’s claim offer,” the FPA submission said.

The submission goes so far as to endorse insurers being subject to alternative documentation requirements specifically for the handling and settling of insurance claims by insurers and insurer’s representatives.

The FPA recommended that clear disclosure and consumer advice warnings should be provided to consumers acting on behalf of the insurer and that the advice warning should include that:

  • the individual is representing the insurer and the interests of the insurer;
  • the insurer’s representative is not representing the interests of the individual making the claim;
  • the information the insurer’s representative provides includes the insurer’s views of the facts of the claim, not the claimant’s views;
  • the insurer’s representative is prohibited from providing personal advice or making

recommendations about the insurer’s settlement offer to the claimant;

  • the claimant should consider their views of the facts relating to the claim and the conditions on their insurance policy prior to accepting the insurer’s claims settlement offer;
  • any process to appeal the insurer’s claim settlement offer; and
  • how the claimant can lodge a complaint.



Recommended for you

Author

Comments

Add new comment