The eligibility criteria for escalating complaints to the Financial Ombudsman Service (FOS), including insurance claim disputes, altered on 1st April 2019. Key definitions and the revised position are set out below.
An eligible complainant before 1 April 2019 is:
- a business which has a turnover or annual balance sheet that does not exceed €2 million and employs fewer than 10 people
- a charity with an annual income of less than £1 million
- a trustee of a trust that had a net asset value of less than £1 million
An eligible complainant from 1 April 2019 is:
- a business which has an annual turnover of less than £6.5 million and either:
- has a balance sheet of less than £5 million; or
- employs fewer than 50 employees
- a charity with an annual income of less than £6.5 million
- a trustee of a trust that had a net asset value of less than £5 million
The FOS can tell insurers to compensate the insured for the full amount of their loss.
However, the FOS only has power to enforce payment up to a capped amount. If the loss value is in excess of the capped amounts, the FOS can only recommend payment of the excess amount but not enforce the payment.
The capped limits are:
- For a complaint from an eligible complainant that both occurred and was referred to the FOS before 1st April 2019: £150,000
- For a complaint from an eligible complainant that occurred before 1st April 2019 but was referred to the FOS after that date: £160,000
- For a complaint from an eligible complainant that occurred after 1st April 2019: £350,000
The maximum award limits will be increased annually on 1 April for inflation, in accordance with the Consumer Prices Index, starting from 1 April 2020.
In most cases, for the FOS to consider a complaint, it must be submitted to the FOS within six months of the final response letter.
For further information visit the FOS website: