Fledgling regulator GISC and its financial backers in the Association of British Insurers are poised for a power struggle, as the ABI launches its new claims handling code.

The long-overdue code, obtained in draft form by Insurance Times, outlines service standards that consumers can expect from insurers. It is a much watered-down version of the original draft after some insurers feared they would not be able to meet the standards. It will be launched late this month or early September as a two-page document.

But in its inaugural rulebook, distributed two months ago, GISC also outlined a set of claims standards that the public could expect to receive from GISC-regulated firms. These were less specific than the ABI's proposals.

GISC head of communications Catherine Nicoll admitted the two codes running concurrently could prove confusing for the public.

She said: "When the thing [the ABI complaints handling code] is published in full, our board will look at it and assess how it can be dove-tailed into our own."

But she also admitted that some aspects that the ABI has set out for response times could be unsuitable for much of the GISC's intermediary member base.

Of particular concern to GISC are the timetables the ABI has set out in the code. These include ten-day deadlines for:

  • informing what evidence is required in relation to a claim
  • replying to letters
  • making a payment once a claim has been agreed

    Complaints must be acknowledged within five working days and a full response given within 40 days.

    The ABI says it does not want the GISC to manage its code because claims handling should not be a regulatory issue.

    An ABI spokesman said: "There is no regulation regarding handling of claims. The code is an industry initiative to develop, implement and strive to improve best practice."

    But GISC has fears that unless it takes over the monitoring of the claims handling, this could undermine its image as a holistic insurance market regulator. The GISC said: "It makes sense that the whole thing is joined up."

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