Financial sector claims for dispute resolution up 18%

Singapore

THE Financial Industry Disputes Resolution Centre (FIDReC) received 18 per cent more claims in the financial year ended June 30, 2020 as complaints against general insurers went up.

The proportion of complaints against general insurers grew from 16 per cent the year before to 21 per cent, which correlated with a significant increase in travel insurance claims, the centre said in its annual report released on Thursday.

In total, 1,227 claims were received in the year. It was the third straight year that the number of total complaints had crossed the 1,000 mark. The number of enquiries rose 14 per cent to 7,049 from a year ago.

As with recent years, the top three types of financial institutions complained against were banks and finance companies (45 per cent), life insurers (27 per cent), and general insurers.

More than 49 per cent of claims involved consumers aged 51 and older. The median claim amount was S$6,020 while the average claim amount was S$44,283. The largest claim amount was S$4 million.

FIDReC concluded 89 per cent of the claims within six months of receipt. The centre concluded 81 per cent of the claims received at mediation stage and 19 per cent after adjudication.

This is the second consecutive year that FIDReC has concluded more than 75 per cent of claims at the mediation stage. The figures included some claims carried over from the previous year.

Of the cases that concluded at mediation stage, 52 per cent were concluded with a settlement and in the remaining 48 per cent, the complainant did not proceed to adjudication, although there was no settlement.

Of the cases completed at adjudication, 19 per cent had an award made in favour of the consumer while 81 per cent had no award made.

For the claims against banks and finance companies, the most significant types of claims involved disputes on inappropriate advice, misrepresentation or disclosure issues (34 per cent); and disputes relating to unauthorised transactions, frauds or scams (29 per cent).

The most significant types of claims against life insurers involved disputes on inappropriate advice, misrepresentation or disclosure issues (47 per cent); and disputes on liability (18 per cent). For the claims against general insurers, a majority of claims (79 per cent) related to disputes on liability.

As at June 30, 2020, there were 615 claims outstanding and brought forward to the current financial period from July 1, 2020 to June 30, 2021.