The Financial Ombudsman Service (FOS) is set to expand its jurisdiction, allowing it to hear disputes over business interruption insurance.
Earlier this week, the FOS board approved mooted changes to the body’s Terms of Reference, one of which includes broadening its powers to hear disputes on all small business insurance products, not just retail products.
The change, which reinstates powers that FOS held up until 2010, allows the regulator to rule on disputes involving business interruption and loss of income incidents.
FOS has acknowedged that the change means it will be considering disputes involving complex loss calculations.
“Not all classes of disputes will give rise to this concern (e.g. claim denials or low-value disputes), but FOS acknowledges that this increase in jurisdiction will inevitably result in these complex matters being referred to it,” it states.
“To ensure that FOS has the appropriate processes, expertise and resources to deal with this expansion in our jurisdiction, we intend to have discussions with industry, relevant stakeholders and experts before expanding this area of jurisdiction.
“In particular, we want to ensure that we are able to deliver on our core service of providing efficient, timely and fair outcomes to parties when dealing with these disputes.”
NIBA CEO Dallas Booth says NIBA is consulting closely with FOS on the changes.
To view the consultation paper, click here.
The changes, which are among those prompted by an independent review of FOS, are due to come into effect in 2015.