Member States have sought to encourage alternative dispute resolution methods in an effort to relieve the workload congestion in the Courts and longer time of legal proceedings. In addition to the “traditional” tools of arbitration, mediation and conciliation, the financial sector in several Member States has set up its own dispute resolution system. Their powers, jurisdiction and resources vary from one Member State to another. After several countries such as Ireland, the United Kingdom, Belgium or France, Spain is creating a new mediation authority to resolve disputes in the banking, investment and insurance sectors.

Its crea­tion was actual­ly deci­ded in 2018, but was momen­ta­ri­ly hal­ted for poli­ti­cal rea­sons and because of the health cri­sis. After seve­ral months of laten­cy, this pro­ject is about to be imple­men­ted “immi­nent­ly” by the Minis­try of Eco­no­my, accor­ding to some sources.

The Inde­pendent Admi­nis­tra­tive Autho­ri­ty for the Pro­tec­tion of Finan­cial Cus­to­mers (Auto­ri­dad Admi­nis­tra­ti­va Inde­pen­diente de Pro­tec­ción del Cliente Finan­cie­ro), will have as its main mis­sion to resolve dis­putes bet­ween the finan­cial sec­tor – inclu­ding insu­rance inter­me­dia­ries — and cus­to­mers, and will be able to issue bin­ding deci­sions up to a cer­tain amount. This thre­shold could be set at 50,000 euros, accor­ding to some sources, but this would not have been deci­ded yet.

Cur­rent­ly, Spa­nish insu­rance com­pa­nies and bro­ke­rage firms have two options for dea­ling with com­plaints against them : they can either set up their own “Cus­to­mer Ser­vice Depart­ment”, or out­source this ser­vice to a “Defen­sor del Cliente” (“an inde­pendent enti­ty or an inde­pendent expert, res­pon­sible for dea­ling with and resol­ving com­plaints and claims). Dis­sa­tis­fied consu­mers must go to court if they do not agree with the solu­tions pro­po­sed to resolve their complaint.

Most of the time, insu­rance com­pa­nies have a “cus­to­mer ser­vice depart­ment” to deal with the large num­ber of com­plaints filed against them. Bro­kers gene­ral­ly opt for a “Defen­sor del Cliente”, often through the use of law firms, and this ser­vice is most of the time free of charge. Thus, in the event of a claim, consu­mers may be offe­red one of these chan­nels to resolve their com­plaint : either the cus­to­mer ser­vice depart­ment or the Defen­sor del Cliente, depen­ding on the ser­vice set up by the bro­ker or the insu­rance company.

With the crea­tion of the Ombuds­man, these media­tion chan­nels will still exist, but consu­mers will now have a “second option” to resolve their com­plaint before suing their insu­rance bro­ker. The two sys­tems will the­re­fore work toge­ther, since consu­mers will still have to first lodge a com­plaint with the bro­ker, before refer­ring the mat­ter to the ombuds­man if their com­plaint is rejec­ted or has not been dealt with within one month.

Note :

  • In some other coun­tries (Ire­land and UK) as well, the deci­sions issued by Ombuds­men are legal­ly bin­ding on both par­ties, while in some other coun­tries (Bel­gium, France), they have a more “moral authority”.
  • Unlike courts, Euro­pean Ombuds­men can issue their deci­sions on a “fair and rea­so­nable” test. Indeed, Ombuds­men are not strict­ly bound to apply the legal prin­ciples or case law deve­lo­ped by courts. This makes it pos­sible to avoid strict appli­ca­tion of the terms of the contract or the rule of law when it would lead to a solu­tion that is contra­ry to com­mon sense or mani­fest­ly unfair. Thus the solu­tions pro­vi­ded by Ombuds­men occa­sio­nal­ly turn out to be dif­ferent from a judi­cial decision.
  • In Com­mon law coun­tries, the powers of Ombuds­men have recent­ly been increa­sed so that they can now direct a finan­cial ser­vices pro­vi­der or dis­tri­bu­tor of insu­rance pro­ducts to pay com­pen­sa­tion up to €500,000 in Ire­land, and £350,000 in the Uni­ted Kingdom.

This new autho­ri­ty will have exten­sive powers, such as the power to declare abu­sive condi­tions null and void. Accor­ding to the sources consul­ted, the new body will be able to rely on the com­plaints ser­vices of the three other finan­cial super­vi­sors : the Bank of Spain, the Natio­nal Secu­ri­ties Mar­ket Com­mis­sion (Comi­sión Nacio­nal del Mer­ca­do de Valores, CNMV), and the Direc­to­rate Gene­ral for Insu­rance and Pen­sion Funds (Direc­ción Gene­ral de Segu­ros y Fon­dos de Pen­siones, DGSFP). The dif­fe­rence is that the deci­sions of the Inde­pendent Admi­nis­tra­tive Autho­ri­ty for the Pro­tec­tion of Finan­cial Cus­to­mers will be binding.

Accor­ding to avai­lable sources, the new media­tor will lack the capa­ci­ty to impose sanc­tions on par­ties. Never­the­less, if it becomes aware of facts that could consti­tute infrin­ge­ments, it will com­mu­ni­cate the infor­ma­tion in its pos­ses­sion to the Bank of Spain, or the rele­vant super­vi­so­ry authority.

In addi­tion, accor­ding to some sources, filing a com­plaint with the future Ombuds­man will gene­rate a cost of €200 to be paid by the insu­rance com­pa­ny or the inter­me­dia­ry, which can only encou­rage them to try to offer accep­table solu­tions to their clients on their own.

Sources : Las deci­siones del nue­vo super­vi­sor de clientes de segu­ros y finan­zas serán vin­cu­lantes has­ta 50.000 euros — Segu­ros News

Eco­nomía ulti­ma la crea­ción del cuar­to super­vi­sor finan­cie­ro para defen­der al cliente | Mer­ca­dos | Cin­co Días (