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Brokers welcome $150,000 compo capRevised guidance on “compensation caps” for external dispute resolution schemes demonstrate the regulator’s willingness to accommodate the unique natures of different sectors of the financial services industry, the National Insurance Brokers Association (NIBA) said today. NIBA was responding to a decision by the Australian Securities and Investments Commission (ASIC) to set new “caps” on schemes. Most compensation schemes will be able to award a maximum of $280,000 to complainants, but ASIC has decided that insurance brokers will be liable to pay a maximum $150,000. Chief Executive Noel Pettersen said today the regulator had heeded the association’s concerns that higher compensation limits would not have been appropriate for insurance brokers. “Insurance brokers have a well defined risk profile and there is very little evidence of consumers being adversely affected by insurance broker negligence, fraud or bankruptcy.” He said dispute resolution statistics show claims against insurance brokers are “few in number and typically worth less than $5000”. The insurance brokers’ disputes resolution scheme was merged with the Financial Ombudsman Service last year. The service had advocated a uniform $300,000 limit on all industry sectors it covered. ENDS For further information contact Noel Pettersen on 02 9459 4300. NIBA is an independent industry association representing 500 firms and more than 2600 intermediaries, who handle almost 90% of the commercial insurance transacted in Australia. Brokers play a major role in insurance distribution, handling $10 billion in premiums annually and placing around half of Australia’s total insurance business |
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