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What does the FCA’s proposals to extend access to the FOS mean to SME’s?

The FCA’s plan to extend access to the Financial Ombudsmen Services and increase its compensation award limit – what does this mean for SME’s and the insurance industry?

From April 1st 2019, the FOS will consider the complaints from SME’s that on discovery of the act or omission, employ up to 50 employees and have a turnover up to £6.5m, a significant increase on ‘micro-enterprises’ of 10 employees and have a turnover 2m Euros. In addition, there are proposals to increase the FOS’s compensation awards from £150,000 to £350,000 and £160,000 for those Acts or Omissions that occurred prior to the 1st April 2019. The FOS’s decision is binding on regulated firms with no grounds for appeal and whose decision is based on what it deems “fair and reasonable, not UK law and following the decisions of the courts.

This is good news for SME’s on the face of that will have more access to the FOS with higher compensation limits, though this will increase in cost to the insurance market will ultimately be borne out by the end consumer. The FOS was designed to handle disputes of consumers and “small businesses”, not handle larger more complex cases based on what it deems “fair and reasonable” and whose decision is binding one party.

#insurance  #FCA #FOS #SME

 


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Johnson Insurance Services is a trading name of Johnson Insurance Services Ltd which is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference no. 784664. Johnson Insurance Services Ltd is registered in England & Wales no. 10822509 at Commer House, Tadcaster, North Yorkshire, LS24 9JF