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CII chief castigates the claim chasers

Ombudsman believes some life offices do not treat complaints correctly

Chartered Insurance Institute president Peter Hales has branded claim-handler firms a national disgrace and says they are to blame for the massive increase in unjust complaints against life companies and advisers.

Hales, who is a board member at Norwich Union, said claim firms must be regulated urgently to bring them in line with the rest of the industry.

He said: “These ambulance chasers are a national disgrace. How many complaints are stimulated by them? This is bogging down people who have real complaints and it needs to be a regulated activity.”

However, during a panel debate at the Personal Finance Service conference in Birmingham this week, Financial Ombudsman Service chief ombudsman Walter Merricks warned that regulating claim firms could enable them to market themselves better rather than drive down the number of groundless complaints. He believes the firms fill a gap in the market because some providers do not treat their complaints properly.

Merricks also revealed his unease over the rapid growth of the ombudsman, which has doubled its staff from 500 to 1,000 since its launch in 2000. He said that this growth was unavoidable due to the massive increase in claims, particularly endowment complaints.

He said: “I feel uncomfortable running an organisation that is twice as big as it ought to be but there is a legitimate opening for claim handlers to come into the market because not all firms are dealing with complaints correctly. I would question whether allowing these companies to say they are regulated would be a good thing.”

CII group public affairs director John Ellis says: “Ambulance-chaser firms are a pain in the industry.”

Anand Associates managing director Bhupinder Anand says: “Many of these firms are unethical and should be regulated. They are making the lives of many IFAs a misery and destroying families. I do not understand how they cannot be regulated since they are talking about regulated products.”

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