New EU Directive affects procedural handling time in insurance industries

A new Act on Complaints Bodies in Consumer Cases entered into force on 1st July 2016. The Act implements EU directive 2013/11/EU on alternative dispute resolution for consumer disputes and is set to establish a just and effective out-of-court dispute resolution procedure for consumers. The Directive requires Member States to ensure that their approved Alternative Dispute Resolution (ADR) bodies are impartial and transparent, offer services at no or nominal costs to the consumer, and ensure that complaints are handled within 90 days of referral.
18. oktober 2016

The Norwegian Financial Services Complaints Board must adjust their case administration procedures to meet new requirements

The Norwegian Financial Services Complaints Board (FinKN) deals with disputes that arise between finance companies and their customers in service areas such as insurance, banking, financing and securities funds. The FinKN has recently submitted an application for approval as an Alternative Dispute Resolution body in accordance with the new Act and is currently awaiting authorisation. Once authorisation is obtained the FinKN will have to adjust its case administration procedures as a result of the above changes. The most important changes are set out below.

The new time limit for handling complaints is 90 days from referral and receipt of all relevant and necessary documents from both parties. For complaints of particularly high complexity this time limit may be extended.

The FinKN Secretariat, whose role is to consider all incoming complaints and prepare the cases for review before the FinKN Committee, is delegated the authority to make decisions in certain cases provided established precedent exists for the issue in question. If the outcome of the complaint is uncertain, the complaint shall be referred to the committee.

To enable the complaints bodies to meet the new reduced time limit, short deadlines for reply will be imposed on both parties to the dispute. These time limits will still need to be “reasonable” and allow the consumers to comment on both the legal and factual parts of the case.  

Lastly, the Act stipulates that the complaints bodies may not charge the consumer a fee exceeding NOK 200 for the complaints-handling procedure.  

Internal complaint-handling systems in banking- and insurers

Internal consumer complaint-handling systems in banking- and insurance undertakings will not be directly affected by the above changes.

The Directive explicitly states that the provisions of the Directive shall not be applicable to procedures before consumer complaint-handling systems operated by traders. Similarly, the provisions of the Norwegian implementing Act - the Act on Complaints Bodies in Consumer Cases – will not apply to internal complaints procedures as such procedures by their nature cannot be defined as Alternative Dispute Resolution bodies pursuant to the Act. 

However, there may be good reason to adjust current procedures and internal practices to ensure that the company has a practice which is roughly equivalent to the provisions of the Directive. Alignment with the new rules can help create predictability and enable the company to make the necessary adjustments in response to potential future legislative change.

The applicable rules and guidelines for internal complaint-handling within the banking, financial, insurance and securities industries can be found in “Circular letter” 12/2012 published by the Financial Supervisory Authority of Norway (the FSAN).

According to these guidelines complaints are to be handled by the undertaking without undue delay. Where the complaint cannot be handled within the anticipated time period, the complainant shall be informed of the reasons for the delay and the expected date for conclusion of the case. As mentioned above, the deadlines for complaint-handling under the Directive is 90 days, which may be extended in cases of particularly high complexity only.

Further, valid rejection grounds are not regulated in the guidelines. Such grounds are exhaustively regulated by the Directive.

Lastly, the Directive eases access to complaints-handling procedures for consumers by imposing an obligation on the complaints bodies to have electronic solutions for the filing of complaints and related case documents. Such a practice could help meet future needs by ensuring an efficient and just out-of-court dispute resolution system.  

Our firm advise insurers and banks on a regular basis. Please see our website to meet our team.

Kontakt oss


Christian Kjellby Nesset
Christian Kjellby Nesset
T: +47 22 81 46 70
M: +47 419 16 656