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1、back Code of practice Action Expectations Our review Our interest Quick links Here, we explain our expectations for insurers engaging in third-party capture. We set out the findings of our recent review, the conclusions we have drawn from them, and our expectations of firms engaging in this practice
2、. What is it and why are we interested? Third-party capture or (third party assistance) is when an insurer deals directly with a person who has a potential claim against their policyholder, in order to investigate and settle the claim. Typically, an insurer offers a compensation payment to settle th
3、e claim directly to a third party, rather than settling through a legal representative for that party. This is mainly used for third-party motor claims. But sometimes its used in other types of insurance, such as employers liability. Concerns have been raised by industry bodies and consumer groups t
4、hat this practice could mean third parties do not receive fair and reasonable treatment and compensation. The handling of all insurance claims by insurers including third-party claims is regulated under the Financial Services and Markets Act 2000. This means that an insurers conduct towards third pa
5、rties must comply with our Principles for Businesses and, where relevant, the claims handling rules in chapter eight of our new Insurance Conduct of Business Sourcebook (ICOBS). Complying with our Principles for Businesses includes acting with integrity, due skill, care and diligence and observing p
6、roper standards of market conduct. The Principles are a general statement of the fundamental obligations of firms under our regulatory system. Breaching them makes a firm liable to disciplinary sanctions. Our review what we found We explored this issue to understand the nature and level of risks to
7、consumers and how firms manage these risks. Our work focused on motor and employers liability claims. We found: Of the total motor and employers liability claims insurers dealt with, only a small proportion were settled by the insurer directly with an unrepresented third party. Most insurers had pro
8、cesses aiming to safeguard the interests of vulnerable third parties, for example minors or those with complex injuries. The data we gathered was inconclusive in determining if unrepresented third parties may have achieved higher compensation if they had legal representation. Third-party capture wha
9、t you need to consider A factsheet for senior management and staff of all insurance firms engaging in third-party capture Further information Principles for Businesses: http:/fsahandbook.info/ FSA/html/handbook/PRIN ICOBS Handbook: http:/fsahandbook.info/FSA /html/handbook/ICOBS/8 A factsheet for se
10、nior management and staff of all insurance firms engaging in third-party capture1 back back Some insurers do not track their own activities in this area and the standards of record keeping in relation to offers being made and accepted varied significantly. We concluded that although an insurer appro
11、aching third parties directly to settle claims does not necessarily cause detriment, there is a risk that in some cases third parties may settle directly with an insurer without considering all of their options. Our expectations of firms what you need to do Settlement offers made by insurers to thir
12、d-party claimants should be fair and adequate and insurers should treat third-party claimants in an open and fair manner. Third-party claimants should be fully informed of their rights, including their right to independent legal advice and of the alternatives to settling directly with the insurer. P
13、lease consider your processes and procedures (this is not a checklist and not intended to be exhaustive). Ask yourself: How do you decide when to make a settlement offer direct to third parties? On what basis do you decide on the financial amount of any compensation offered to third-party claimants?
14、 What training do you provide for staff dealing with third parties (including staff visiting third-party claimants)? How do you communicate and explain the rights of third parties? What other procedures do you have in place to ensure you safeguard the interests of third-party claimants (including th
15、ose who are more vulnerable eg minors and those with complex injuries and claims)? Do you inform third parties of any referral fees you receive from solicitors? How do you manage complaints from third parties on the process or level of compensation received? Does the way you remunerate staff create
16、any risks which may disadvantage a third-party claimant? And look at your record keeping (this is not a checklist and not intended to be exhaustive). Ask yourself: How do you monitor the level of activity in this area of your business? How do you check staff adhere to processes and procedures in thi
17、s area? How do you verify that third parties are fully informed of their rights, including the right to independent legal advice? How do you track compensation amounts offered to third-party claimants to ensure they are consistent and fair? Third-party capture what you need to consider 2 Key point I
18、nsurers should have identifiable and accessible processes/procedures in place to mitigate the potential risks to third parties. Key point Insurers should properly track their own record-keeping activities so they can satisfy themselves (and us) that they are adequately managing the potential risks t
19、o third parties. A factsheet for senior management and staff of all insurance firms engaging in third-party capture back back Our actions what well do next Based on our findings and the conclusions we have drawn from them, we have decided on a range of actions to address the potential risks to third
20、 party claimants. These include: Updating our Moneymadeclear consumer information to raise third-party claimants awareness of their rights. Publishing this factsheet to update the industry on the potential risks and outline our expectations. Continuing to take seriously any evidence of impropriety i
21、n insurers handling of third-party claims. Taking action against individual insurers not acting consistently with our requirements. Supporting the Association of British Insurers (ABIs) initiative on an industry code of practice in this area. Industry code of practice The ABI is planning to publish
22、a code of practice for insurers dealing with third-party claims in early 2010. We welcome this development and believe that codes of practice can be useful benchmarks for firms to measure their performance. We also expect insurers conduct to continue to comply with our requirements. If you have a qu
23、estion about the code of practice, please contact Malcolm Tarling, Media Relations Officer at the ABI, on 020 7216 7410. Third-party capture what you need to consider 3 Key point If the range of actions we are taking does not appropriately address the potential risks to third-party claimants we will consider whether further regulatory intervention is required. A factsheet for senior management and staff of all insurance firms engaging in third-party capture
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