The changes will take effect in September
Changes have been made to the Insurance & Financial Services Ombudsman Scheme’s (IFSO Scheme) Terms of Reference (TOR) and constitution, to provide more consumers access to free dispute resolution, rather than having to go through the courts.
From Sept. 1, the IFSO Scheme can investigate complaints about insurance claims, credit, and other financial services and products of up to $350,000+GST, or $2,625+GST per week for regular payments, up from the previous limits of $200,000+GST and $1,500+GST.
“Previously, anyone with a claim over the limit of $200,000 would have had to pay for legal representation to take their case to court,” said Karen Stevens (pictured above), Insurance & Financial Services Ombudsman. “Court proceedings are not cheap and they’re certainly not free – like the IFSO Scheme process.
“The changes bring us into line with some other dispute resolution schemes in the financial sector and will mean a number of extra cases are now eligible for us to look at.”
With wild weather events such as the Auckland flooding and Cyclone Gabrielle resulting in many claims, both small and large, the ombudsman said the change in monetary limits will allow the IFSO Scheme “to investigate more complaints from those affected at the higher end and will ensure more consumers get increased access to justice.”
The changes, which were approved following two rounds of feedback with participants and stakeholders, in late 2022 and early 2023, also included clarifying the IFSO Scheme’s decision-making process and increasing the amount that can be awarded for special inconvenience to $5,000.
The IFSO Scheme’s TOR and constitution were last revised in 2015 and have since then been updated to comply with law changes and to include the proposed changes by the scheme’s independent review, carried out by John McMillan in 2018.
Read the full Terms of Reference and constitution.
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