How to resolve a 3 rd party insurance debt Denis Nelthorpe Footscray CLC

Project Aim Project Aims Improve lawyer’s capacity to resolve insurance disputes through IDR & FOS - CGC Focus advocacy on lack of capacity to pay rather than liability and quantum

Key reference material ASIC – Corporations Act Insurance Industry Code of Practice (COP) Financial Ombudsman ‘Terms of Reference’ (TOR) Insurance Contracts Act

Regulation of IDR & FOS Corporations Act 2001 S 912A A mandatory obligation for all licensees s912A(2) a dispute resolution system  Internal dispute resolution procedures, and  Membership of an approved (EDR) scheme Corporate Governance FOS - Independent Board of Directors FOS – Reporting to ASIC CGC – Independent Code Compliance Committee

Not Again! Dealing with 3 rd party debt

Using the Code Use the Code Refer to Code of Practice – Financial Hardship 8.6 Agreement or referral to IDR 8.7 Put recovery action on hold 8.8 (C) Financial Hardship – Seek a waiver 8.8 (D) Confirm outcome in writing 8.10 Agents/solicitors will identify insurer as client 8.12 ASIC & ACCC debt collection guidelines

Using the Code Three Simple Letters Letter to Insurer – Installment or waiver Letter to Insurer – IDR Letter to FOS CGC – Breach of Code

Code Process for Disputes Code Process for Dispute 8.6 Referral to IDR Insurer respond to stage 1 – 15 days Insurer respond to stage 2 – 15 days insurer referral to FOS - Jurisdiction FOS Jurisdiction - 3 rd Party claim < $3000

Facts about IDR & FOS IDR is a specialist role within company IDR statutory requirement 3 RD Party debt outside FOS complaints jurisdiction Code breach complaint to CGC

3 rd party debt –outcomes Clearer process Waiver more likely IDR/CGC avoids courts & legal costs Benefits for the client Code provides closure as matter is finalised Benefits for a lawyer More focused advocacy on lack of capacity to pay