Complaints body forecasts 500 voluntary applications by year end
More than 250 insurance brokers have elected to join the Financial Ombuds-man Service (FOS) on a voluntary basis since April.
Membership of the FOS, which handles customer complaints, will become compulsory on 14 January 2005 when FSA regulation of general insurance brokers begins.
But a spokesman for the FOS said many brokers had taken up the opportunity to join voluntarily beforehand, and he said that based on applications yet to be processed, more than 500 could be signed up by the end of 2003.
The spokesman said that brokers who opt for voluntary membership are not charged a joining fee or annual levy, but pay a £600 fee for each complaint referred to the FOS.
But, so far, complaints against insurance brokers have been low. "We've received very, very few complaints so far," the spokesman said. "We're not making any money out of this."
Aside from access to the dispute resolution process, brokers who join the FOS can also use its technical advice desk and take advantage of complaint handling training.
But those brokers who sign up early will not benefit from lower annual or case fees once the scheme becomes mandatory.
Commercial motor broker Fyfe Group is among those to have opted for voluntary membership, and it is currently putting in place the mechanics necessary to begin operating under the scheme.
Paul Inskip, managing director of Fyfe, which trades under the Road Runner and Motor Trade Solutions brands, said that Fyfe saw a commercial advantage in joining early, as the company could use the FOS logo on its products and promote its membership of the service to customers.
Inskip said that with an internal policy to respond to all complaints within seven days, the company would not have difficulty meeting the FOS requirement that consumers must receive a response to complaints within eight weeks. "It's inevitable. You might as well get used to it," Inskip said. "If the broker is run properly I don't think we have anything to fear from the FOS."