THE INSURANCE OMBUDSMAN BUREAU AND FINANCIAL SERVICES DISPUTES — AN OBITUARY?

Publication Date01 Mar 1994
DOIhttps://doi.org/10.1108/eb024810
Pages220-226
AuthorNEIL MUNRO
subjectMatterAccounting & finance
THE INSURANCE OMBUDSMAN BUREAU AND FINANCIAL
SERVICES DISPUTES - AN OBITUARY?
Received: 19th April, 1994
NEIL MUNRO
NEIL MUNRO
HAS BEEN ASSISTANT TO THE INSURANCE
OMBUDSMAN FROM 1992 WITH SPECIAL
RESPONSIBILITY FOR HOME INCOME PLANS. HE
WAS PREVIOUSLY WITH TARGET LIFE
ASSURANCE COMPANY IN A SENIOR
COMPLIANCE ROLE. THE VIEWS EXPRESSED
HERE ARE THOSE OF THE AUTHOR AND NOT
NECESSARILY THOSE OF THE INSURANCE
OMBUDSMAN BUREAU.
ABSTRACT
This paper
examines
what
the
financial
services industry
expects from
the Insurance
Ombudsman
Bureau.
It
measures the
IOB's
success in meeting these expectations
against
the yardsticks
of public
confidence
and
cost-effectiveness.
In the light of Lord
Ackner's recently accepted recommendation
that
the IOB be replaced by a new
Ombuds-
man
scheme,
this
paper
concludes
that the
IOB has
failed'
the industry by
asserting
the
functions for which it was originally
created.
BACKGROUND
The Insurance Ombudsman Bureau
(IOB) was formed by the industry in
1981 to resolve complaints from
policyholders in respect of both
general insurance and financial ser-
vices matters. It became a Recog-
nised Complaints Body under the
Financial Services Act 1986 (FSA)1
and was recommended by the Life
Assurance and Unit Trusts Regula-
tory Organisation (LAUTRO) to its
members as a means of resolving
complaints from policyholders.2 As
almost all major LAUTRO members
have taken up this invitation, the
IOB has effectively acted as the pri-
mary body for resolving policy-
holders' complaints in respect of
relevant investment business (as
defined by the FSA) sold by agents
or representatives of insurers.3
In July 1994, the new regulator of
the industry, the Personal Invest-
ment Authority (PIA) will replace
LAUTRO and create its own
Ombudsman scheme designed to
consider almost all of those financial
services disputes currently referred
220

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