9.3 Claim Disputes and Dispute Resolution

9.3 Claim Disputes and Dispute Resolution

Quick Summary: A dissatisfied policyholder should complain to the insurer first, escalating to the Chief Executive if necessary. If that fails, the Financial Industry Disputes Resolution Centre (FIDReC) offers free filing, mediation and low-cost adjudication. FIDReC can adjudicate claims up to S$150,000 for disputes filed on or after 1 July 2024. Awards bind the insurer only if the consumer accepts. Mediation, arbitration and the courts are the other routes.

Step 1: The Insurer's Own Complaints Process

GIA's Code of Practice sets these complaint-handling commitments for member insurers dealing with individual policyholders:

• explain the complaints procedure in the policy or service documents;
• acknowledge a complaint within 7 business days;
• ask for any additional information within 7 business days of the complaint;
• give an update within 15 business days of the last communication if the matter takes longer;
• assign a complaint officer and keep a complaint register; and
• if the customer is still dissatisfied, let them appeal to the Chief Executive, who will respond within 15 business days.

GIA's Code of Practice for Agents also requires agents to acknowledge and respond to customer complaints within 7 business days and to escalate unresolved complaints to their principal insurer.

Step 2: FIDReC

FIDReC is an independent dispute resolution centre for disputes between consumers and the financial institutions that subscribe to it, including insurers.

Who Can Use FIDReC

• Eligible consumers include individuals, sole proprietors, small businesses and charities with a customer relationship with the institution; persons with a beneficial interest; trustees and personal representatives; insureds; and third parties with third-party coverage under an insurance contract, such as motor accident claimants against the other driver's insurer.
• The institution must first have had the chance to resolve the dispute.
• The complaint must be brought within 6 months of the institution's final reply.

What FIDReC Cannot Handle

Examples include disputes solely about the investment performance of a product, cases under investigation by law enforcement (including where fraud has been alleged and referred to the police), employment or agency disputes between an institution and its staff, cases already settled privately, and matters already decided by a court.

The Two Stages

1. Mediation by a case manager: there is no claim limit for mediation, and filing a dispute is free. Settlement terms agreed at mediation bind the parties.
2. Adjudication: if mediation fails, the consumer may choose adjudication by an independent adjudicator.
   • Claim limit: S$150,000 per claim for disputes filed on or after 1 July 2024 (S$100,000 for earlier filings). Larger claims can be adjudicated only if the consumer limits the claim or the institution agrees to a higher limit.
   • Fee: S$50 per claim for individuals and sole proprietors, and S$250 per claim for small businesses and charities, plus GST.
   • Effect: if the consumer accepts the award, it is binding on the financial institution. If the consumer is not satisfied, they are not bound and may still sue.

The FIDReC-NIMA Scheme

The Non-Injury Motor Accident (NIMA) Scheme helps consumers resolve non-injury motor accident claims below S$3,000 against a third party's insurer. Its adjudication fee is S$250 plus GST.

Step 3: Mediation, Arbitration and the Courts

• Mediation (Singapore Mediation Centre): GIA's Code of Practice suggests mediation for claims where litigation would be costly and slow. It is voluntary and confidential, and any settlement is by agreement.
• Arbitration: many policies contain an arbitration clause referring disputes over the meaning of the policy or the parties' rights to arbitration in Singapore under Singapore law. The Code's model wording refers to a single arbitrator agreed by insurer and insured within 14 business days of the start of the arbitration. Arbitration is private, and the award binds both parties with very limited grounds of challenge. The governing statutes are the Arbitration Act 2001 for domestic arbitrations and the International Arbitration Act 1994.
• Courts: claims can be brought in the Magistrates' Courts (up to S$60,000), the District Courts (up to S$250,000) or the General Division of the High Court (above S$250,000). Hearings are public, and the losing party usually pays a share of the winner's costs.

Comparing the Routes