COMPLAINT HANDLING & SERVICE RECOVERY IN INSURANCE

SUBMITTED BY: T.Y.B& I TO, PROF: - JALPA

Acknowledgement
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E would like to express our profound gratitude to our project guide Prof. Jalpa, who has so ably guided our research project with her vast fund of knowledge, advice and constant encouragement, which made us, think past the difficulties and lead us to successful completion of the project. We have tried to cover all the aspects of the project & every care has been taken to make the project faultless. We have tried to write the project in our words as far as possible and simplified all the concepts by presenting it in a different form. Well be looking forward in future for such type of project. We are eagerly waiting for fruitful comments & constructive suggestions.

10 Kavita Kohli
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08 Farah khan Jinsha Nochiyil 18 Heena Patel 20

Shifa Shaikh 29

Index
Sir . no s
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INTRODUCTION:

Particular Agno
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CUSTOMER RESPONSE CATOGORIES TO SERVICE FAILUERS AND REASONS FOR COMPLAINTS

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Reasons of complaints Complaint Handling Process How can policyholder lodge a complaint

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5 6 7 8 9 10 11 12 13 14

CUSTOMER COMPLAINT ACTION: TYPES OF COMPLAINRES: JAY - CUSTOMERS: MEANING OF SERVICE RECOVERY: Top 7 Customer Service Tips to Handle Complaints and Keep Customers Happy SERVICE GUARANTEE: Guidelines for Complaint handling in Insurance sector Customer case studies Conclusion Bibliography

17 18 19 21 23 24 26 31 38 39

INTRODUCTIO N.
What is a Complaint? A complaint is defined as:
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Any expression of dissatisfaction by a customer or potential customer about service delivery by the company or its agents, and/or about company or industry policy. Every time you voice dissatisfaction about any aspect of our business, our staff will take your comments seriously. We believe that by responding positively and proactively to your complaints and comments we will not only retain our existing customers, but attract new ones. We appreciate that customer feedback is vital in helping us deliver continuous improvement across our business. Even with the best organizations, failures can just happen. They may be due to the service not available when promised, may be delivered late or too slowly, the outcome may be incorrect or poorly executed. All this types of failures bring about negative experiences. If they are left unsolved, they can result in customers leaving, telling others about the negative experiences or even challenging through customer courts. Some complaints are made while service delivery is still taking place, while others are made after the fact. In both the cases, how the complaint handled may determine whether the customer remains with the firm or seeks new suppliers in the future.

MEANING
Adopting a narrow definition of a complaint will mean you are not able to assess accurately the real needs of your customers or the true level of dissatisfaction. Definition of a complaint is very broad:
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...An expression of dissatisfaction made to a supplier in relation to, (a) Carrying on business as a carrier (b) Carrying on business as a carriage service provider,(c) Supplying a content service using a listed carriage service; and (d) Supplying a telecommunications products amongst your customer base.

CUSTOMER RESPONSE CATOGORIES TO SERVICE FAILUERS AND REASONS FOR COMPLAINTS:

When service is failure or not satisfied, the customers can take may a kind of public action or public process or may take some kind of private action. If customer take public action or government action, they can complain directly to the service firm or to the organization or they can complain to the third party or they may take any kind of legal action to seek their redress or to get their right or benefits. If customer take any kind of private action, they can switch directly to the provider or may be used any kind of negative word of mouth to the organization. Understanding Customer Responses to Service Failure: Why do customers complain? O Obtain compensation o Release their anger o Help to improve the service o Because of concern for others What proportion of unhappy customers complain? Generally 9% to 37% of unhappy customers can make complaints to the firms.

 Why dont dissatisfied customers complain? There are three primary reasons why dissatisfied customers dont complaint: 1] They think that it is not worth the time or effort. 2] They further think that no one would be concerned about their problem or solving it. 3] They do not know where to go or what to do. a) Who is most likely to complain? b) Where do customers complain? c) What do customers expect once they have made a complaint? Dealing with Complaining Customers and Recovering from Service Failure: Take complaints professionally and not personally. Be prepared to deal with angry customer who may behave in an insulting way to service personnel who may not be at fault. Take the perspective that customer complaints allow firm a chance to O Correct problems, o Restore relationships. O Improve future satisfaction for all. Develop effective service recovery procedures.

REASONS OF COMPLAINTS:
Restitution: Restitution means making well a loss. If a customer facing any kind of damage or dissatisfaction during the working from the organization, they can make complaint to that institution to take the proper restitution from such firms. Self-Esteem: Some customer can make complaint only for their selfesteem. Self- esteem means to thing you highly of or high regard. These people think that we are the best in the organization and do the complaints only just for satisfying their objective or to collect some kind of attention or praise from other peoples. Theoretical Explanation: These kinds of customers are listening or got any kind of information from some other source and believe only on that. Theoretical explanation means dealing with theory only. These people can sort some form of theory about the organization whether it is good or bad and make a complaint about it.

Complaint Handling Process

1. Complaint Accepted or Rejected :

Complaints must be in writing and must be lodged within 6 months of the alleged discriminatory conduct taking place, although, where appropriate, complaints can be accepted out of time. Once the ADC has received a written complaint, the first step is to decide if the complaint is covered by the Act. The Delegate has 60 days in which to decide whether to accept or reject a complaint (usually this decision is made within 2 weeks). A complaint may be rejected if it is lacking in substance, misconceived, or fails to disclose any prohibited conduct. This first stage is a low threshold test and initial acceptance of a complaint does not mean that the ADC has found that discrimination has occurred. The Complainant has the burden of proof on the balance of probabilities 2. Respondent Notified: If the complaint is accepted, the Respondent will be notified in writing of the allegations which have been made; the relevant sections of the Anti-Discrimination Act; and the name of the Delegate who has been appointed to investigate and Conciliate the complaint. The Respondent is given the opportunity to reply in writing to the Complaint.

3. Representation: A party is not automatically entitled to legal representation. However, usually the ADC will permit
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parties to have legal representation, provided that the involvement of the solicitor will not undermine the conciliation process. 4. Investigation: At the investigation stage the role of the Conciliator is that of impartial fact finder, investigating both sides of the complaint. During an investigation, the conciliator may need to: Interview the Complainant, Respondent and any other witnesses Request documentary support to assist the investigation. Investigations are carried out as informally and as quickly as possible. Many complaints are settled at this stage as a result of negotiations between the parties with the help of the conciliator. The Complainants allegations are contained in the first letter to the Respondent. The Respondents reply is forwarded to the Complainant for any further comment which is then sent to the Respondent for a final reply. If the complaint is not resolved during investigation, the Delegate considers the evidence and makes a written decision as to whether or not there is a prima facie (sufficient evidence to suggest a probability of success at hearing) case of unlawful discrimination The complaint can be discontinued at any stage if there is insufficient evidence or if it found to be trivial, frivolous, vexatious or misconceived.

5.

Conciliation:

If there is a prima facie case and the Delegate believes that the complaint can be resolved, the parties can be directed to participate in conciliation process which may
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include a conciliation conference facilitated by a Conciliator.

6. Hearing: If the complaint is not settled by conciliation the matter will be referred to the Anti-Discrimination Commissioner to determine whether or not there has been discrimination or other prohibited conduct. Hearings are usually open to the public. If the Commissioner decides that unlawful discrimination has occurred orders can be made, including ceasing prohibited conduct; to pay damages (up to maximum of $60,000); to apologise; to undertake training; to amend policy and procedures. 7. Appeals: All final decisions of the Delegate or the Hearing Commissioner can be appealed against to the Local Court.

Insurance Complaint Handling Protocol Compliant handling has always been an issue that insurance brokers have had to deal with. For years
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Scrivens has had a formal complaint handling protocol. This protocol provides customers with a formal internal process through which they can lodge complaints and have them reviewed and resolved at the broker level. Certain provinces have now formalized compliant handling protocols through their respective provincial legislation. The Province of Ontario has introduced new legislation concerning the handling of complaints. Scrivens has deciphered these new obligations and has fine tuned its complaint handling protocol so that it respects the demands of the new legislation. Notwithstanding any Protocol governing our actions, Scrivens and its employees will, at all times when dealing with a person who has a complaint, act with respect, courtesy and will always respond in a highly professional manner. If you have any questions concerning the Scrivens compliant handling protocol, please do not hesitate to contact: Peter Scrivens Corporate Governance Office and Ombudsman 613-236-9101 ext 1100 pscrivens@scrivens.ca Scrivens complaint handling protocol What is a reportable complaint? A reportable complaint consists of:

When a complaint: o Expresses a reproach o Identifies a potential or suffered prejudice o Claims a corrective measure

If all three elements are not included in the complaint letter, we must insist that the complainant modify his complaint letter and indicate the missing elements. It is also necessary that all three elements be put in
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written form by the complainant in order that he can submit his complaint. The complainant can either send his complaint in a letter or by e-mail. We must offer support to a complainant that is unable to write. The content of the letter must afterwards be validated by the complainant by obtaining his signature on it. Responsibility of the person in charge of managing the Complaint handling policy The person responsible for managing the Complaint handling policy must respond to the legislative authorities when need be. The person responsible for managing the Complaint handling policy must maintain a register of complaints. The complaints need to be classified as per the categories of complaint set forth by the National Agency. The person responsible for managing the Complaint handling policy must proceed to send an annual report to the National Agency within two months after the closing date of its fiscal year. The acknowledgment of receipt and notice The person responsible for managing the Complaint handling policy must proceed to send a letter acknowledging receipt of the complaint and a notice to the complainant without delay. The acknowledgement of receipt must:

Give the name and coordinates of the person responsible for the Complaint handling policy Give the delay for the receipt of a final position letter and give the delays for subsequent communications Give the principal elements of the Complaint handling policy.

The Notice must: Advise the complainant that if he is dissatisfied with

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the complaint examination procedure or its outcome, he may request the firm to forward a copy of the complaint file to the Agency. Advise the complainant that he must wait until he has received a final position letter or until the expiration of the delay to send a final position letter prior to referring this file to the National Agency. Advise the complainant that he has 1 year to ask that his file be transferred to the National Agency for a review following the expiration of the three month delay that the Firm has to send their final position letter. Advise the complainant that he can ask the National Agency to review his complaint and that the National Agency can, if it is so inclined, suggest mediation if both parties consent to it. Mention that the statute of limitations before the civil courts are not interrupted because the complainant has asked for a review of his complaint by the National Agency Content of the Complaint file A complaint file must be maintained by the person responsible for managing the Complaint handling policy. The complaint file should contain the following elements:

Reproach Prejudice (potential or suffered)

Corrective measure The detailed analysis completed by the firm A written and motivated response from the firm to the complainant *Do not forget to transfer the complaint file to the National Agency within a reasonable
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timeframe.
Agree

How can policyholder lodge a complaint The IRDA has recently established the Consumer Affairs Department to give a special focus to and oversee the compliance by insurers of the IRDA Regulations for Protection of Policyholders Interests and also to empower consumers by educating those regarding details of the procedures and mechanisms that are available for grievance redressal. Policyholders must be provided with inexpensive and speedy mechanisms for complaints disposal and the IRDA (Protection of Policyholders Interests).

In 2002 IRDA made regulations that made it necessary for insurers to have efficient and speedy grievance redress mechanisms. The regulator issued Guidelines for Grievance Redressal, which laid down specific timeframes and turnaround times (TATs) for response, resolution, etc., which would further strengthen the redressal systems insurers already have in place. IRDA monitors the effectiveness of the mechanism by creating a central repository of industrywide insurance grievance data; IRDA is on path to implement the Integrated Grievance Management System (IGMS). IGMS will create a gateway for policyholders to register complaints with insurance companies first and if need be to escalate them to the IRDA Grievance Cell. IGMS is a comprehensive solution which not only has the ability to provide a centralized and online access to the
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policyholder but complete access and control to IRDA for monitoring market conduct issues of which policyholder grievances are the main indicators. IGMS will have the ability to classify different complaint types based on predefined rules. The system will be able to assign, store and track unique complaint IDs and also enable intimation to various stakeholders as required, within the workflow. The system will enable defining of Target Turnaround Times (TATs) and measure the actual TATs on all complaints. The system will set up alerts for pending tasks nearing the laid down Turnaround Time. Thus, the system will automatically trigger activities at the appropriate time through rule based workflows. A complaint registered through IGMS will flow simultaneously to the insurers system as well as the IRDA repository. Updation of status by the insurers would automatically be mirrored in the IRDA system. IGMS will be able to generate reports on all criteria like ageing, status, nature of complaint and any other parameter that is defined. Thus, the IGMS will provide a standard platform to all insurers to resolve policyholder grievances and to provide IRDA with a tool to monitor the effectiveness of the grievance redressal system of insurers. IRDA has recently introduced the IRDA Grievance Call Centre (IGCC) that provides for a toll free number 155255. IGCC provides an additional channel for policyholders to lodge their grievances and also seek their status over phone/e-mail. The Call Centre environment will interface with IGMS, once the IGMS is implemented. The IGCC has enabled policyholders easy access to the grievance redressal cell of IRDA both through telephone and e-mail, apart from providing details of the redressal systems of insurance companies whenever policyholders require them. The Call Centre carries out filling of grievance registration forms on the basis of the call. The IGCC also provides a channel for tracking of grievances. Further, the IGCC also educates policyholders about the Insurance Ombudsman who provides a channel for fair
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disposal of complaints falling within the laid down jurisdiction. With a view to going beyond facilitation of complaints resolution, IRDA has begun to drill down into details of complaints to identify instances of violation/noncompliance of various provisions of the applicable Regulations through enquiries and inspections. If needed, regulatory action is taken. Insurance Ombudsman is reviewed for possible changes and expansion of jurisdiction, to ensure that grievances that are not resolved by insurers and get escalated to the Regulator and/or Ombudsman are decided conclusively, except where they would fall necessarily within the ambit of the courts.

CUSTOMER COMPLAINT ACTION:

Customer complaint action following service failure. The action can be of various types. A) A classified customer can chose to complaint on the spot to the service provider given by the company, the opportunity to respond immediately. This is often the best- case scenario for the company. It has the second chance right at that movement, to satisfy the customer. Keep his or her business in future; he may potentially avoid any negative word of mouth. B) Some customers choose not to complaint directly to
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the provider but rather spread negative word of mouth about the company to friends, relatives and co- workers. This negative word of mouth can be extremely detrimental because it can reinforce the customers feeling of negativism and spread that negative impression to others as well. Further the company has no chance to recover unless the negative word of mouth is accompanied by a complaint, directly to the company. C) Many customers are very passive about their dissatisfaction. They are simply saying or doing nothing, take action or not and at some point of time they will decide weather to stay with that provider or not.

TYPES OF COMPLAINRES:
Research suggests that people can be grouped into categories based on how they respond to failures. Four categories of response types were identified in a study that focused on grocery stores, automotive repair service, medical care and banking and financial services. These are as follows: 1] passive: This group of customer is least likely to take any action. They are unlikely to say anything to the provider, less likely than others to spread negative words of mouth, and unlikely to complaint to a third parties. 2] Voicers: These customers actively complaint to service providers, but they are less likely to spread negative word of mouth to go to third parties with their complaint. They
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tend to believe complaining as a social benefit and therefore dont hesitate to voice their opinion. 3] Irritate: These consumers are more likely to engage in the negative word of mouth to the friends and relatives to switch provider than the others. They are about average in their prosperity to complain to the provider. They are unlikely to complain to the third parties. 4] Activists: These consumers are characterized by above propensity to complain on the entire dimension. They will complain to the provider, they will tell others, and they are more likely than any other group to complain to third parties.

JAY CUSTOMERS.
Jay customers are those who act in a thoughtless and abusive way, causing problems to the firm, employees and other customers. The word JAY comes from JAYWALKER used to describe people who cross streets at unauthorized places or in a dangerous manner. The word JAY is a slang term of stupid. To discourage abuse and opportunistic behavior, we need to deal with customer fraud. No organization wants an ongoing relationship with an abusive customer.

TYPES OF JAY- CUSTOMER.

1] THE THIEF: No intention of paying--sets out to steal or pay less. This customer does not pay for services and is out to steal goods and services or tries to pay less than full price by
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methods like switching price tickets, contesting bill on baseless grounds etc. Riding free on public transportation, sneaking into movies theatres etc. 2] THE RULE BREAKER: Some customers break rules. There may rules laid down by the service provider to ensure safety or there may be rules imposed by govt. agencies etc. when such rules are broken they may create problem for the customers and the service. 3] THE BELLIGERENT: We can see such customers in stores or at the airport or a hotel they could be shouting angrily or coolly mouthing off insult, threats and obscenities. They may such behaviour when they are ignored or when service breaks down or service are clumsy or when staff is unhelpful or when orders are given incorrectly. 4] FAMILY FEUDERS: People who get into arguments with other customers often members of their own family. 5] THE VANDAL: Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture. Bored and drunk young people are a common source of vandalism. Unhappy customers who feel mistreated by service providers take revenge. 6] DEAD BEAT: Customers who fail to pay for the services they have received they are called deadbeat. There may be many reasons why customers end up by doing this. It is not that
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they do not want to pay but they may not be in the position to pay. They are different from thieves.

MEANING OF SERVICE RECOVERY:

Service Recovery refers to the actions taken by an organization in response to a service failure. Failures occur for all kinds of reasons- the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed and employees may be rude. All this type of failures brings about negative feelings and responses from customers. Research has shown that, resolving customer problem effectively has a strong impact of customers satisfaction, loyalty and bottom- line performance. That is customer who experience service failure, but ultimately satisfied based on recovery efforts by the firm, will be more loyal than those whose problems are not resolved.

CHARACTERISTICS OF AN EFFECTIVE SERVICE RECOVERY:

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1) Unconditional: - The service recovery should make its promise unconditionally no strings attached. 2) Meaningful: - The firm should recover elements of the service that are important to the customer. 3) Easy to Understand and Communicate: Customers need to understand what to expect. Employees need to understand what to do. 4) Easy to Invoke and Collect: The firm should eliminate hoops or red tape in the way of accessing or collecting from the recovery.

Top 7 Customer Service Tips to Handle Complaints and Keep Customers Happy If customers are the lifeblood of businesses, then customer complaints are the antidote to a thriving business. Or, is it? While many businesses fear the onslaught of complaints from customers, in truth, proper handling of these complaints can work to a businesss advantage. Whenever a customer complains, he is in fact handing you a lesson in how to please others for add-on business. So, take advantage of this opportunity with these seven customer service tips on how to handle complaints and keep your customers happy.
1. Act Quickly

When a customer complains, the best way to appease the customers bad feelings is to act on it
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quickly. Remunerate customers as fast as possible with a refund when appropriate, or offer an apology. Acting swiftly to correct the wrong consoles the customer and imbibes them with a sense of loyalty as well. You can be sure the customer will want to shop with you again because you handled his complaint timely and correctly.
2. Respond to Complaints Professionally

Its easy to get carried away with a petulant customer and brush him off completely, but that could be costly for your business. Instead, take charge of the situation by being polite and listening intently to the customers problem. Taking this approach has a calming influence on the upset customer and more often than not, allows him to see reason and leave knowing that hell return again to do business with you.
3. Send Out Customer Survey Forms

This is important to ferret out customers who are unhappy with your business for some reason, but arent voicing their concerns. Rather than losing them for good to your competitors, get them to fill out customer survey forms and follow up with a phone call to as many of these customers as possible. Not only will this keep your customers happy, but you will have discovered new ways of fine-tuning certain aspects of your business.
4. Thank those who complain

this may sound odd to many, but customers who complain are doing you a service by helping you improve your business. The least any business should do is to thank them wholeheartedly. It may take these customers by surprise, but a simple thank you can lighten the atmosphere and allow unhappy customers to have a change in attitude and become your most loyal customers.
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5. Reassure The Customer

Customers who complain very often feel aggrieved that their complaints come to naught because no one is listening. To tackle this situation, recap to the customer what youve just heard and then deliver an assessment of how youre going to tackle the problem and inform him when it can be resolved. Many businesses are too quick to respond with an Ok, Ill fix that, without the reassurances the customer sorely needs.
6. Provide a Space for Customers to Vent Their

Frustrations I dont mean a physical space, though that could work in the most extreme of cases, but create an avenue for them to vent their frustrations without getting in the way. Only when theyve settled down, then approach them with your questions to determine the cause of their problems. This works very well to get to the bottom of the situation without getting embroiled in unnecessary confrontations.
7. Track Customer Complaints

Once a customer has filed a complaint, its best to ensure that the particular complaint never arises again. The best way to do this is to track complaints, unearth its root cause and make sure its addressed once and for all. Tracking complaints can usually identify a pattern, giving you vital information to potential problems and addressing them before a customer can raise the issue. Let your customers know that you have such a system in place and theyll appreciate the fact that you really care about catering to their happiness.

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SERVICE GUARANTEE:
Guarantee is an assurance of the fulfilment of a condition. In a business context, a guarantee is a pledge or assurance that a product offered by a firm will perform as promised and, if not, and then some form of reparation will be undertaken by the firm. For tangible products, a guarantee is often done in the form of a warranty. Services are often not guaranteed. Service experience is intangible. The Power of Service Guarantees: = Force firms to focus on what customers want. = Set clear standards. = Require systems to get & act on customer feedback. = Force organizations to understand why they fail. = Reduce risks of purchase and build loyalty. How to Design Service Guarantees: = Unconditional. = Easy to understand and communicate. = Meaningful to the customer. = Easy to invoke. = Easy to collect.

BENEFITS OF SERVICE GUARANTEES:

A good guarantee forces the company to focus on its customers. An effective guarantee sets clear standards for the organization. A good guarantee generates immediate and relevant feedback from customers. When the guarantee is invoked there is an instant opportunity to recover, thus satisfying the customer and helping retain loyalty.
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 Information generated through the guarantee can be tracked and integrated into continuous improvement efforts. Employee morale and loyalty can be enhanced as a result of having a service guarantee in place. A service guarantee reduces customers sense of risk and builds confidence in the organization. DEALING WITH CUSTOMER FRAUD: If in doubt, believe the customer. Keep a database of how often customers invoke service guarantees or of payments made for service failure. Insights from research on guarantee cheating: Amount of a guarantee payout had no effect on customer cheating. Repeat-purchase intention reduced cheating intent. Customers are reluctant to cheat if service quality is high. (rather than just satisfactory) Firms can benefit from offering 100 percent money-back guarantees. Guarantees should be offered to regular customers as part of membership program since regular customers are unlikely to cheat. Excellent service firms have less to worry about than average providers.

Guidelines for Complaint handling in Insurance sector

Complaints Definition

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A complaint for the purposes of these Guidelines shall refer to a complaint for which redress is being sought, and which has not been addressed by an insurer, in relation to: A. a product sold or offered for sale, or withheld from sale; B. a service offered or failed to be offered as per agreed terms; C. an insurer which is regulated by the Commission. Complaints Policy 1. An insurance company shall establish an internal Complaints Handling Policy, which shall be decided by its Board of Directors, to address consumer complaints free of charge. Insurance companies, whether engaged in long term or general business, are henceforth required to have in place and maintain complaints handling scheme, hereby any complaint made to the company can be handled in a proper, efficient and timely manner. 2. Insurance companies should indicate clearly to their customers, whether by way of notice displayed in a conspicuous position on their premises, or by way of terms included in their policy document, the existence of a complaints handling structure within the company. Such notice should also summaries the companys complaint handling system. In addition, for the purposes of satisfying the requirements of these Guidelines, an Insurance company may wish to produce a leaflet which summarizes its internal complaint structure.

Complaints Documentation For the purposes of satisfying the requirement of these Guidelines, insurance companies shall provide their customers with the following information, whether byway of leaflet or other document:
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 How to make a complaint; To whom to address the complaint; Documents and information which should be produced with the complaint; When the complainant should expect a response from the company; Any other information which may be of relevance to the company and the complainant. The above document should be written in clear, plain language that can easily be accessed by consumers in general. Complaints Handling Scheme 1) Insurance companies need to ensure that adequate financial resources are allocated for complaints management and that sufficient levels of authority are delegated to the officer in charge of complaints resolution. 2) A Complaints Coordinator shall be appointed by the insurance company. While insurance companies should make sure that its employees are familiar with its Internal complaints procedure, a Complaints Coordinator shall be designated for the handling of complaints. A Complaints Coordinators duties and functions shall include: receiving complaints made to the company, whether in writing, in person or by way of telephone; responding in a reasonable manner to all complainants; Dealing with complaints in an efficient and professional manner; maintaining records of all complaints received, whether satisfactorily resolved or otherwise.
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Complaints Procedures 1) A consumer or other person wising to make a complaint to the insurer should be informed about the insurers internal complaints procedure and referred to the Complaints Coordinator. The Complaints Coordinator shall record the complaint and request such details and Documents as May reasonable are required. 2) The Complaints Coordinator shall deal with complaints promptly and send the complainant an acknowledgement of complaint received within 3 working days of filing. 3) A complaint shall normally be settled within 30 working days from the date of the filing of the complaint. A complainant shall be informed in writing of the companys final response to the complaint within this time limit. Where possible, the final response letter shall indicate the reasons or circumstances which have been considered for the settlement or non settlement, as the case may be, of the claim. The final response letter shall propose, as appropriate, any offer or other means of Settlement made to the complainant.

Complaints Reporting
1) A Complaints Coordinator shall submit a report of all complaints received on a regular basis which shall be not less than twice a year to the insurance companys Board of Directors. Complaints reports shall be made available to the Commission upon request.

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A complaint report may contain the following information: The total number of complaints received within a period of time; A breakdown by type of complaint received; The number of complaints settled and the type of settlement reached; The number of complaints not resolved, out of which the number of complaints referred to the Commission. 2) Further to complaints reports, the Commission may request additional information relating to the complaints handling of the insurance company. Referral to the Commission A complaint may be referred to the Commission by the complainant where no settlement has been reached within 30 working days as prescribed in these Guidelines. The Commission will entertain complaints only to the extent that all attempts to settle the complaint have failed and the consumer is not satisfied with the outcome. The Commission may require an insurer to address a complaint and propose means of redress to the extent that the complaint deals with regulatory breaches, Malpractice or unfair treatment. In discharging its functions under these Guidelines, the Commission may request an insurer to provide copies of the complaint letter and the final response letter.

Record Keeping Insurance companies shall keep records of complaints for a minimum of three years from the date of filing of the complaint, and where an insurance contract extends to More than 3 years, such records shall be kept for the duration of the contract.
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Customer case studies

A little about Sahara India Life Insurance.

Sahara India Life is the first private sector company in the domestic Life Insurance sector to go solo without any foreign partner. SILICL is promoted by Sahara India, a USD 7,000 million diversified conglomerate having varied business interests in Public Deposit Mobilization, Housing,
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Aviation, Media & Entertainment and new forthcoming projects like Consumer Products, Information Technology, Hospitals and Agricultural products. Sahara India is a unique business organization that takes pride in being not just a business enterprise but an emotionally integrated family, the world's largest family of over 600,000 members. Sahara India started 25 years ago with a small savings venture having assets of just USD 45 and only 3 members. Today, it is a major corporate entity having an asset base of over USD 7,000 million and 1707 establishments across the nation.

The company's growing pains.

Sahara India was launching their Insurance division. As an Insurance company they had to have a ready and reliable back up for their customer data. All in all, Sahara required an integrated solution that would provide them the following benefits: 1. Better manageability through server consolidation 2. Create redundancy to support criticality of their applications 3. Flexibility to scale up servers as and when required 4. Low total cost of ownership of IT infrastructure.

Short complaints

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Household sum insured inflation-linking causing policyholder to be over-insured whether policyholder entitled to premium refund. Mrs. G and her aunt had, for many years, held household buildings and contents insurance for their two-bedroom terraced house in Wales. The policy was inflation-linked and premiums increased by 15% annually. Mrs. G did not query the sums insured until 1999, when her daughter began managing her affairs. The annual premium had increased by then to 1,674.91. The contents were insured for 141,488 and the buildings sum insured was 212,042. The correct amounts should have been 40,000 and 55,000 respectively. The insurer accepted that the values for both buildings and contents were far too high and it offered a rebate of 1,000 and a further years cover without charge.

Complaint upheld Although it was the policyholders responsibility to assess the replacement cost, the consequence in this case of the firms applying an automatic annual increase was an insured value which was totally unjustified. If the policyholder submitted a total loss claim, the sums insured would have had no bearing on the insurers liability. We considered a fair result would be achieved if the insurer refunded 50% of the premiums paid over the previous five years, with interest, and it agreed to do this.

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Household contents minimum security requirements policyholder noting requirements before start of insurance whether policyholder entitled to compensation for distress and inconvenience. maladministration distress and inconvenience whether cancellation of policy by policyholder justified compensation. Mr. C telephoned the insurer on 12 June to ask about household insurance. He wanted the cover to start on 1 July. When he received the policy documents, he was dismayed to learn that cover depended on his complying with a minimum security condition. He protested, saying no one had mentioned this when he enquired about the policy, and he cancelled the policy on 21 June. The insurer returned his premium in full but rejected his demand for a payment of 3,000 as compensation for the inconvenience he said the insurer had caused him.

Complaint rejected The insurer recorded most calls made to its call centres and we were able to listen to tape recordings of Mr. Cs conversations with the insurers staff. On several occasions, matters of security had been discussed at considerable length. We were therefore surprised that Mr. C alleged he had not been told of the insurers requirements. He had not been put to any unnecessary inconvenience and we agreed that the insurer was fully justified in refusing to pay compensation.

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Household buildings sum insured reinstatement whether insurer entitled to limit cost of reinstatement to sum insured. Following a serious fire at Mrs. Ys house in March 1999, the insurer appointed loss adjusters to assess the damage. They considered that repairs would not exceed the sum insured of 110,000. They also calculated that the sum insured was too low and that the cost of rebuilding would be 135,000. Mrs. Y increased the sum insured to the amount they recommended. The insurer paid over 7,000 for emergency works to make the property safe, but there was bad weather in April and further damage occurred. When tenders for the repairs came in, however, the lowest was for 139,250. The insurer agreed to reinstate the property, but it limited repair works to a total of 103,000 the sum insured less the cost of emergency work. This was sufficient to rebuild the property, but left the first floor a shell. Mrs. Y said she had been promised that if she increased the sum insured to the amount the loss adjusters recommended, the insurer would meet the claim in full and would make no deduction for under-insurance.

Complaint upheld The policy gave the insurer the option of making cash settlement, repairing, replacing or reinstating. The insurer had clearly opted to reinstate and was therefore bound to replace as new, with no deduction for wear and tear or depreciation. The cost was accordingly not limited to the sum insured. If the insurer wished to impose a ceiling of 110,000 on its liability, it had to communicate that to the policyholder. It had not done this until after the house had been demolished and it could not impose the limit in the middle
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of agreed works. We required the insurer to meet the full cost of reinstatement. 04/19 maladministration confidentiality insurer disclosing information in breach of policyholders instructions whether compensation payable. Mr. D insured his house and garage with one insurer, while the business property, which he stored in the garage, was insured by a different insurer. When he made a claim under the business property policy, the loss adjusters appointed by that insurer wrote to Mr. Ds household insurer, seeking information. The household insurer responded, confirming that it insured the house and garage, giving the policy number, and stating that no claim had been received. Mr. D was extremely aggrieved to learn that his household insurer had provided information to the loss adjusters, asserting that this was in breach both of his specific instructions and the Data Protection Act. He demanded 60,000 compensation for damage to his stock. The household insurer accepted that it should not have released information to the loss adjusters. It offered Mr. D 100 in recognition of the distress and inconvenience it had caused. Complaint rejected There was no link between the household insurers unauthorized disclosure of information to the loss adjusters and any loss by Mr. D. No evidence had appeared which indicated that the disclosure had influenced the loss adjusters handling of the business insurance claim. In the circumstances, we were satisfied that the insurers offer was appropriate and we stated that we would not require it to increase its offer or to contribute to Mr. Ds alleged losses.

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04/20 household sum insured Mr. J insured his house for an index-linked sum 285,000 when he renewed the insurance in 1993. In February 1995, he discovered landslip damage to his tennis court. He appointed an engineer and notified the insurer. It became apparent almost immediately that the damage was progressing rapidly and, in March 1995, the insurer agreed to pay for emergency work to stabilize the site. This work did not halt the slippage and a meeting was held in June 1995 to discuss possible remedies. Mr. J asked the insurer to settle his claim by declaring the property a total loss and paying the full sum insured. However, the insurers loss adjusters were of the opinion that the insurers liability was limited to underwriting the cost of remedial work up to the sum insured. Work continued, becoming more complicated as time went on, until eventually the site was stabilized. The insurer informed Mr. J that the sum insured had been exhausted. He complained, asserting that the insurer had elected in June 1995 to reinstate the property instead of making a cash settlement, and that it was therefore bound to meet the balance of the full cost of repairing his house. This was estimated at 145,000. Complaint upheld Cases of catastrophe such as this are fortunately very rare. The sum insured had been correctly calculated and was sufficient to cover the rebuilding and associated fees, as stipulated in the policy. However, it was not sufficient to cover the additional cost of stabilizing the site. Although insurers are generally aware there is a theoretical possibility of rebuilding costs exceeding an adequate sum insured, the insurer in this case had not advised Mr. J of this possibility.

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The insurer had never agreed to reinstate the property regardless of cost. However, we did not accept it was appropriate for it to limit its settlement of this claim to the sum insured. The insurer had been closely involved in approving repairs and, once they had begun, both the insurer and the policyholder had effectively been committed to their completion. It was reasonable for Mr. J to believe his property would be fully reinstated and he could not be said to have been indemnified if he was left with a badly cracked house on a stable site. More generally, Mr. J was not in a position to assess the likelihood of such rare combinations of events when he decided on the sum insured. The sum insured was generally accepted to be appropriate and we concluded that, in such cases, the sum insured should not act as an absolute cap on the insurers liability. We therefore required the insurer to pay 100,000 towards Mr. Js repair costs. We also recommended the insurer to meet the balance of his costs, although we had no jurisdiction to make a binding award for any amount in excess of 100,000.

Conclusion

What about the old saying: "The customer is always right?"

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Every business has to weigh the cost of that, depending on what kind of complaints it's getting. Customers are interested in knowing that you're taking their problems seriously because their business is valuable to you. Things generally go well if you stay in touch with the customer, explain what you're doing about their complaint, and show that you're striving to do the best you can. That kind of personal interaction really wins a business a lot of points and it makes the customer feel much better, whether the problem was real or perceived.

Bibliography
http://www.businessweek.com

http://www.gov.mu/portal/sites/ncb/fs c/download/complaints.pdf.

http://www.internationallawoffice.co m/Account/Login.aspx? ReturnUrl=http%3a%2f

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%2fwww.internationallawoffice.com %2fnewsletters.

http://dspace.scmsgroup.org/han dle/10562/108.

http://www.scrivens.ca/html/complaint.html http://www.eastcoast.co.uk/Global/Customer%20Complaints%20Nov %202009.pdf

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