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How to resolve a 3 rd party insurance debt

How to resolve a 3 rd party insurance debt. Denis Nelthorpe Footscray CLC. Project Aim. Project Aims Improve lawyer’s capacity to resolve insurance disputes through IDR & FOS - CGC Focus advocacy on lack of capacity to pay rather than liability and quantum. Key reference material.

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How to resolve a 3 rd party insurance debt

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  1. How to resolve a 3rd party insurance debt Denis Nelthorpe Footscray CLC

  2. Project Aim • Project Aims • Improve lawyer’s capacity to resolve insurance disputes through IDR & FOS - CGC • Focus advocacy on lack of capacity to pay rather than liability and quantum

  3. Key reference material • ASIC – Corporations Act • Insurance Industry Code of Practice (COP) • http://www.codeofpractice.com.au/ • Financial Ombudsman ‘Terms of Reference’ (TOR) • http://www.insuranceombudsman.com.au • Insurance Contracts Act

  4. Regulation of IDR & FOS • Corporations Act 2001 S 912A • A mandatory obligation for all licensees • s912A(2) a dispute resolution system • Internal dispute resolution procedures, and • Membership of an approved (EDR) scheme • Corporate Governance • FOS - Independent Board of Directors • FOS – Reporting to ASIC • CGC – Independent Code Compliance Committee

  5. Not Again! Dealing with 3rd party debt

  6. Using the Code • Use the Code • Refer to Code of Practice – Financial Hardship • 8.6 Agreement or referral to IDR • 8.7 Put recovery action on hold • 8.8 (C) Financial Hardship – Seek a waiver • 8.8 (D) Confirm outcome in writing • 8.10 Agents/solicitors will identify insurer as client • 8.12 ASIC & ACCC debt collection guidelines

  7. Using the Code • Three Simple Letters • Letter to Insurer – Installment or waiver • Letter to Insurer – IDR • Letter to FOS CGC – Breach of Code

  8. Code Process for Disputes • Code Process for Dispute • 8.6 Referral to IDR • 10.11 Insurer respond to stage 1 – 15 days • 10.13 Insurer respond to stage 2 – 15 days • 10.19 insurer referral to FOS - Jurisdiction • FOS Jurisdiction - 3rd Party claim < $3000

  9. Facts about IDR & FOS • IDR is a specialist role within company • IDR statutory requirement • 3RD Party debt outside FOS complaints jurisdiction • Code breach complaint to CGC

  10. 3rd party debt –outcomes • Clearer process • Waiver more likely • IDR/CGC avoids courts & legal costs • Benefits for the client • Code provides closure as matter is finalised • Benefits for a lawyer • More focused advocacy on lack of capacity to pay

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