Outcome 6 of Treating Customers Fairly says that customers do not face unreasonable post-sale barriers to change a product, switch provider, submit a claim or make a complaint. Of the four, claims is where the outcome is tested most often and felt most sharply, because a claim is the moment the product is supposed to deliver. This article looks at what "promptly and fairly" means in operational terms for an insurer, an underwriting manager, a funeral administrator or the intermediary who stands between the client and the claim.
The rules behind the outcome
Outcome 6 is not only a principle. The Policyholder Protection Rules under the Long-term and Short-term Insurance Acts set claims-handling standards: a documented claims process, acknowledgement of a claim, a decision within a reasonable period, written reasons for a repudiation, the right to make representations and the details of the ombud. The General Code of Conduct requires an FSP to act with due skill, care and diligence in the interests of clients, which the FSCA reads to include the way an intermediary assists with a claim. A funeral administrator operating under a Category IV licence carries the insurer's service standards by contract.
Define "promptly" before anyone measures it
The single most useful step is to write down the standard. For most funeral and short-term claims that means:
- acknowledgement of the claim and the list of required documents within one business day;
- a decision within a fixed number of business days of receiving the complete documents;
- payment within a fixed number of days of the decision;
- an update to the claimant at a fixed interval while the claim is open.
The numbers should be ones the business can meet and the insurer has agreed to. A standard that is missed every week is worse than no standard, because the record shows the business knew.
Fairly: the four questions on a repudiation
A repudiation is fair when four questions can be answered on the file:
- Which policy term was relied on, and was that term disclosed clearly at the point of sale?
- Was the claimant told what was missing, and given reasonable time to supply it?
- Was the decision made by someone with authority, on the facts in the file, with the reasons recorded?
- Was the claimant told, in writing, why the claim was declined, that they may make representations, and how to reach the ombud?
Where a repudiation fails one of these, Outcome 6 has failed, whatever the policy wording says.
Monitoring that proves the outcome
Outcome 6 evidence comes from three registers:
- The claims register, with the date received, date complete, date decided, date paid and outcome for every claim. Turnaround against the standard is calculated from it each month.
- The repudiation register, with the reason, the term relied on and whether representations were received. A repudiation rate that moves without a change in the book is a monitoring trigger.
- The complaints register, in which every claims complaint is categorised by cause. Repeated complaints about documents never requested at the point of sale point at Outcome 3, not at the claims team.
RCC samples all three in compliance monitoring for insurance intermediaries and funeral administrators, and reports the turnaround figures to the Key Individual every quarter.
Learning from the complaint
The Outcome 6 evidence the FSCA values most is a change. A claim form simplified because claimants kept omitting a field, a script corrected because representatives were promising a payout timeline the insurer could not meet, a product removed from the shelf because its waiting period kept surprising clients. Each one is a complaint that taught the business something, and a minute that records it.
An intermediary does not decide claims, but Outcome 6 still applies. Clients should know at the point of sale how to claim and what the waiting periods and exclusions are; the intermediary should help with the claim when asked, and should escalate a claim that is stuck. A representative who sells and disappears has created the barrier the outcome prohibits.
