Ombudsman And Referee Schemes

Most of the SROs have special schemes for dealing with complaints from the public. These provide a readily accessible route for settling disputes by using an independent arbitrator to consider the evidence on both sides and decide or recommend an equable solution. The schemes fall into two types: Ombudsman schemes under which you are not bound by any decision and can take your complaint still further by turning to the courts; and Referee schemes under which you're bound by the decision reached and give up your right to go to court. Your complaint may be referred to the scheme by the SRO, or you can contact them direct. Brief details of the schemes most relevant to private investors are given in the following sections.

WARNING You must usually have exhausted the internal complaints procedure of the investment firm you're dealing with before the Ombudsman or Referee schemes can take up your case.

The Insurance Ombudsman Bureau

What it is Scheme set up in 1981 to deal with a wide range of insurance complaints (including general insurance, such as car and house insurance), and which is now, for investment-type life insurance, part of the LAUTRO complaints mechanism. It's a voluntary scheme - most but not all insurance companies are members. The Bureau can't deal with complaints concerning companies who aren't members - LAUTRO would deal with these direct.

When you can complain Regarding any aspect of your dealings with a life insurance company except those areas specifically excluded. Complaints might concern, say, dubious selling practices, or excessive delays in a company's dealings with you. The most common type of complaint concerns the failure of an insurer to pay a claim because of a dispute about what the policy actually says or means.

When you can't complain The main types of complaints that the Ombudsman can't deal with concern the calculation of bonuses, surrender values or overall returns on a life policy, and disputes about insurance intermediaries, such as brokers. The Ombudsman can only deal with disputes between you and your own insurer; he can't deal with `third party' disputes - in other words, those involving claims against someone else's insurer.

Points to note You must take your case to the Ombudsman within six months of receiving a final offer from the company concerned. The Ombudsman's decision is binding on the company but not on you, so you can still take court action. He has the power to make awards up to 200,000 (or 20,000 a year, in cases about permanent health insurance). Contact:

Insurance Ombudsman Bureau

31 Southampton Row, London WC1B 5H J Tel: 020-7242 8613

The Regulators

The Financial Services Act itself just sets out a framework of rules. The real regulation is in the hands of the Securities and Investments Board (SIB), which has delegated many of its day-to-day powers to the five Self Regulating Organisations (SR0s). All investment businesses must be `authorised' either directly by the SIB or by belonging to one of the SR0s, and they must abide by the rules of the regulating body.

Some professions (such as solicitors and accountants), which conduct investment business which is 'incidental' to their main activities, need not belong to an SRO, but can be... see: The Regulators

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