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Cedric Stephens New rules for claim settlements are in effect

Hurricane Gilbert wrecked the transmission and distribution system of the country’s electricity and telephone service providers in 1988 – thirty-five years ago. Many telephone consumers could not contact relatives and friends overseas, and those without standby generators had no electricity.

I recall travelling to the telecommunications provider’s Duke and North Streets offices one night to make an overseas call. There were scores of persons present, and long waiting times to use the company’s facilities were the norm.

Today, one can use a smartphone in the privacy of one’s home and connect 24/7 with people all around the globe, free of charge. The infrastructure is more resilient than the old distribution lines.

These thoughts entered my mind as I read the Tell Claudienne column in last week’s Sunday Observer. She is a self-described problem-solver. One of her readers was involved in a collision in Kingston at a busy intersection with another motorist about 12 months ago. His insurers sent the claim report to the third-party insurers 10 months later. Two months passed, and the “settlement documents had still not been prepared,” he said. In the meantime, he incurred costs of $285,000.

The claim was settled within two weeks of the problem-solver’s intervention. I concluded that the outcome would not have been the same without Claudienne’s help. The article did not explain the long delay in paying what appeared to have been a routine matter. Shouldn’t the claims process have worked as effortlessly as the processes involved in speaking with business associates, friends, and relatives overseas by telephone or buying stuff overseas through Amazon?

A new regulatory regime governing how claims are to be settled took effect on January 1, 2023. Most persons, including Claudienne and the person who wrote her, need to be made aware of the new rules. There were no postings on traditional or social media networks about it.

Despite the new regulations, motor claims settlement processes have not advanced beyond those that existed in the post-Gilbertian period of the 20th century. I have yet to see any signs that changes are happening or on the horizon. Shouldn’t the insurance regulator be agents of change?

In September 2016, I penned an article titled ‘Why Can’t the FSC be More Like the OUR?’ It was written in response to a reader’s query that was posed this way: “I had contrasting experiences with two entities that are regulated by the Office of Utilities Regulation and two insurance sector companies – a broker and an insurer – supervised by the Financial Services Commission. In the case of the utilities, whose performance is subpar based on the recent outages, I thought that the OUR was doing a much better job for utility consumers than the FSC was doing for insurance consumers. The mishandling of my claim left me feeling unfairly treated without any avenue to get redress. Why can’t the FSC be more like the OUR?”

It is timely to re-examine the seven-year-old article against the background of the alleged fraud at Stocks and Securities Limited, an FSC-supervised entity; the December 2022 Insurance (Amendment) Regulations; the OUR’s performance metrics for the fourth quarter of 2022 and calendar year; and the experiences of the claimant Claudienne wrote about.

Some readers may view this as an apples-versus-oranges comparison. I don’t see it this way. The FSC and the OUR are regulatory authorities. Even though they supervise entities in different sectors of the economy, they can learn from each other.

The following are the points that stood out after carefully studying the four items listed in the preceding paragraph:

1. Clarity of Mission: The OUR provides evidence that it understands its mission to consumers while the FSC needs to be more certain about its accountabilities. This was obvious from my review of the websites of the two agencies. Had the high-profile persons appointed to head the FSC boards or who occupied positions as commissioners read the piece I wrote, likely, the SSL fiasco would not have occurred. The lack of mission clarity was on full display in the former executive director’s public statements at a shambolic press conference held after the disclosure of the fraud at SSL.

2. OUR’s Guaranteed Service Standards for Utilities: One of the topics discussed on the OUR’s website is guaranteed standards. These are defined as “minimum service level agreements between the OUR and the utility companies to ensure customer value. A breach of a Guaranteed Standard results in a compensatory payment to the affected customer/account. Breaches may attract automatic compensation by the utility provider or a claim submission by the affected customer.” The standards are customer driven.

3. No insurance service standards: Even though Section 142M of Part XIIA of the Insurance (Amendment) Regulations impose general rules for how insurance companies and brokers manage claims, specific, customer-driven benchmarks still needed to be set. Unsurprisingly, there are no monetary penalties for breaches and claimants are not entitled to compensation in these cases.

4. Complaints management: The OUR has a robust system for managing consumer complaints linked to its guaranteed service standards. The consumer affairs unit has created a database of complaints per utility. This allows it to analyse complaints for each provider. There was an 18 per cent drop in complaints received between 2021 and 2022. The FSC does not appear to keep complaints statistics for the entities it supervises. This omission is connected to its failure to describe its mission with precision.

5. The publication and dissemination of information about the OUR’s quarterly performance metrics provide insights to its executives, board of directors, and consumers into how the organisation is discharging its responsibilities to consumers. The FSC’s Invested digital magazine reflects the commission’s failure to articulate its mission.

A regulatory expert recently described the OUR, which is certified by the International Standards Organisation, as “world class”. The FSC has, unfortunately, not achieved that status.

Despite its new rules, the motor-claims processes will likely remain wedded to the practices of a century that ended over two decades ago until the commission has a clear sense of its purpose and mission. The ball is in your court, new FSC Chair, Richard Byles.

n Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: or

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