GIGI 3.6 Claims handling (ICOB 7)

This section sets out the rules that apply to intermediaries when handling claims on behalf of a customer. These rules are in ICOB 7. ICOB 7 sets out the rules applicable to insurance companies and intermediaries. This section of the Guide deals with the obligations of intermediaries only.

Most of the obligations relating to claims handling fall on insurance companies and if you act on behalf of an insurance company in relation to a claim (e.g. you have delegated authority for claims handling) then the insurance company is responsible for ensuring that the rules are complied with. But if you act for the customer in relation to a claim, there are certain rules that you must comply with. These rules are set out in ICOB 7.4. In particular, you must:

1. (1)

   act with due care, skill and diligence when acting for a customer in relation to a claim; and

2. (2)

   avoid conflicts of interest.

You could have a conflict of interest if, for example, you were acting for both a customer and an insurance company in relation to a claim; or you were acting for two customers that were parties to a dispute over liability. If you face a potential conflict of interest, you must tell the customer(s) of the conflict and ask their consent to continue to act for them. However, if it is not possible to manage the conflict by disclosing it the customer(s), you will need to withdraw from acting for one or both parties.

You may have arranged a policy for a customer, but when it comes to a claim, you act for the insurance company and not for the customer. In these cases, you must tell the customer that you are acting for the insurance company and not for him in relation to the claim.

If you are notified of a claim by a customer, but do not have the insurance company's authority to handle the claim, you must forward the notification to the insurance company promptly or tell the customer immediately that you cannot deal with the notification.