Cedric Stephens | FSC complaints process opaque and unfriendly

QUESTION: I filed a written complaint against an insurer with the Financial Services Commission (FSC) on May 14, 2019. The company, I felt, had acted unfairly and/or unethically in dealing with a claim. They did not even reply to my letter. My hope was that the FSC would have investigated and confirmed that my client was improperly treated.

Nearly six months later, I have got the distinct impression that nothing has been or is likely to be done. A very helpful and professional staffer told me that processing would take 15 days. An investigator would then be assigned and would contact me. This has not happened. I made many attempts to speak with him. In August I succeeded. He told me he was still awaiting documents from the insurer. I am now realising that my time has been wasted. I am extremely disappointed. Can you help?

− D.B., Clarendon

 

INSURANCE HELPLINE: One of the aims of the Financial Services Commission (FSC) according to its enabling legislation, is to promote stability and public confidence in the operations of the institutions that it regulates, and, implicitly, in the commission. Its lack of action in responding to your complaint has done nothing to inspire confidence in the insurance system or in the regulator.

Those experiences, plus others, I believe, have added to your negative outlook despite talk of economic stability. Knowing this, I shared your email with an FSC contact. My aim was to discover the reasons for the inaction and get a date when the matter would be resolved.

The FSC official replied immediately. He said that he had asked one of his colleagues to investigate and promised to “revert” – a word that is invariably misused and one that I hate – “when advised.’ After one week had passed, I sent a reminder.

The reply was stunning: “I was on leave till today, but the advise (sic) I was given by my colleagues in Investigations and Enforcement Division is that they do not comment on ongoing investigations.” Shouldn’t he have known this?

The I&ED’s response can, at best, be interpreted as ambiguous. At worst, the division appears to be saying that when a complaint is filed with the FSC, I&ED is not accountable to anyone, including the complainant. It will not provide any information until the investigation is completed, however long it takes.

I replied to the official as follows: “I am astonished by the I&ED’s response. How bureaucratic – especially when I have brought to your attention what appears to be dysfunctions in I&ED. It is not a law enforcement entity carrying out criminal investigations where such responses would be appropriate. The enquiries are purely administrative. I&ED’s activities are ultimately designed to protect the integrity of the financial system and inspire the confidence of buyers of insurance and other financial services and the public.

“The lack of transparency in the non-handling of this complaint by the regulatory body after nearly six months does not inspire confidence. Tell I&ED to wheel and come again … the response is inimical to the image and reputation of the FSC. The failure to comment on a legitimate complaint filed by the legal representative of a claimant against an insurance company after six months can be construed as laziness on the part of the FSC or a blatant attempt to cover up divisional dysfunction.”

The official was not shamed into responding to these statements several days later.

‘Fairness, accountability, confidentiality communication, excellence, integrity and teamwork’ – in that order – are the labels that the FSC would like to be linked to its name. In management-speak, these are the FSC’s more important beliefs or values.

All employees and directors – the FSC calls them commissioners – are expected to share and practise them. How do I know this? The beliefs are stated in the commission’s 2015-16 annual report.

Is the investigations and enforcement division a law unto itself that subscribes only to one of the FSC’s values: confidentiality? Or, are the other six terms that are said to represent its beliefs simply nice-sounding words that are not put into action?

The FSC’s complaint-handling rules for insurers and intermediaries are, surprisingly, stricter than those it has set for itself. The 15-day processing period confirms this. Here are a few other examples from pages 8 and 9 of the commission’s 2019 revised market conduct guidelines:

- Complaints should be settled in a timely, effective, and fair manner;

- Each complaint should be acknowledged within five business days;

- The complainant will be provided with the name of one or more individuals to be the complainant’s point of contact;

- The complainant will be provided with regular written updates on the progress of the investigation at intervals of not greater than 20 business days;

- Attempts should be made to investigate and resolve complaints within 40 business days. Where 40 business days have elapsed and the complaint is not resolved, the complainant will be informed of the anticipated time frame within which it will be resolved; and

- The complainant will be advised in writing of the outcome of the investigation within five business days of the completion of the investigation.

Full details of how the FSC handles consumer complaints can be obtained by following this link: fscjamaica.org/file-a-complaint/. There is nothing there to suggest that ‘they do not comment on ongoing investigations’.

Also, there is apparently no appeal process for handling cases like yours when I&ED fails to act or has made a mistake. This contrasts sharply with the practices of the Office of Utilities Regulation – see our.org.jm/ourweb/consumer-issues/appeals-process. Why the differences?

Former FSC executive director Janice P. Holness in an article published in this newspaper on February 17, 2015, encouraged consumers to file complaints “particularly when they perceive they are being unfairly treated”. She also extended an invitation to all “external stakeholders to say how it can continue to improve on the quality of services that it offers in line with its corporate values”.

This article is a response to that invitation, nearly five years later. It is sincerely hoped that the current FSC head, Everton McFarlane, will find the time to prepare a more appropriate explanation for the inaction during the last six months.

- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com