We are inviting feedback on proposed changes to our Terms of Reference and Constitution

Message from the Chair

The Insurance & Financial Services Ombudsman (“IFSO”) Scheme is consulting on proposed changes to its Terms of Reference (“TOR”) and Constitution. Professor John McMillan AO recommended that a number of changes should be made, to improve the dispute resolution service for Participants and their customers as part of the Independent Review of the IFSO Scheme he carried out in 2018, and some of these recommended changes impact on the TOR and Constitution.

The TOR and Constitution were last revised in 2015. Since then, there have also been law changes which require the TOR and Constitution to be updated.

Due to Covid and the disruption caused industrywide, the IFSO Scheme is now proposing to make those changes to its TOR and Constitution, which will come into effect in early 2023.

The proposed changes primarily reflect law changes; align the TOR with the other Approved Dispute Resolution Schemes’ (“ADRS”) rules; implement the recommendations made by the last independent public review; and/or recognise modernised processes and procedures.

MBIE started its process to align the ADRS rules at the beginning of 2020 and intends to increase the jurisdiction of the ADRS and align timeframes within which a consumer can bring a complaint. Cabinet has now approved the policy changes to set consistent rules, and regulations will be made at some stage next year.

The Regulatory Impact Statement outlines the changes on the Treasury’s website. However, because of the uncertainty around when the regulations are likely to be made, the IFSO Scheme Commission has decided by to proceed with the necessary changes now, as a matter of some urgency.

Sue Suckling, IFSO Scheme Chair

The key changes to the TOR proposed are:

increasing the Applicable Monetary Limit to $6,700 plus GST for claims relating to regular payments and $500,000 plus GST in other cases; and
clarifying the IFSO Scheme’s decision-making process; and
increasing the amount that can be awarded for special inconvenience to $10,000.

The key changes to the Constitution proposed are:

amending the process for selecting Commission members to better reflect the current membership of the IFSO Scheme; and
clarifying Participants’ obligations to provide their customers with a “bona fide” complaints process including how they need to provide the information and when.