The Financial Institutions Commission (FICOM) recently considered complaints from the community about their flood insurance coverage. They have reviewed the Grand Forks case within the scope of the applicable legislation and have not identified any regulatory breach.

FICOM suggests the following options for those who may need to assistance as they work through the recovery process.

Options and Next Steps

  1. Claim Disputes: Insurers are expected to treat their customers fairly and respond to any claim disputes or complaints in a timely manner. If there is a disagreement over the settlement terms, the policyholder can appeal the decision with their insurance company directly and request the insurer to reassess the claim. All insurance companies have a complaint resolution process so that these types of issues can be addressed in a fair and timely manner. This process may also allow the insurance company to consider additional facts or clarify reasons for a decision. The FIA requires insurance companies post their complaint resolution process on their website.
  2. No Response from Insurer: Although FICOM has no legal authority to resolve claim disputes between an insurance company and a policyholder, they expect insurers to respond to policyholder concerns and provide appropriate explanation of claim decisions and options for escalating claim disputes. If a policyholder has not received a response in a reasonable timeframe after following up with their insurer during the complaint process, the policyholder can contact FICOM directly.

FICOM Review process

Information and Documents Considered

  • Email correspondence;
  • Information collected from the policyholders;
  • Available information relating to the flood event; and
  • Applicable legislation such as the Financial Institutions Act (FIA) and the Insurance Act.

 

Review and Assessment

When FICOM assesses complaints on any insurance company they regulate, they first review to determine if there appears to be potential misconduct by the company. If it appears so, they determine how best to proceed by considering FICOM’s jurisdiction and whether there is a specific breach of the legislation. However, not all complaints result in an investigation or a public sanction.

Most of the concerns revolved around disagreement over the interpretation or fulfillment of contractual obligations between the insurer and the insured. Insurance is a legal contract where only the courts have authority to determine whether the insurer is interpreting and/or applying the contractual terms properly based on the terms of the contract.

When it comes to claims settlement and process, each insurance contract is different. The length of time and the process one goes through will likely be different because of differences in claim coverage, settlement amount, and duration of claim. As a regulator, FICOM does not comment or intervene in a civil dispute matter or order an insurer to negotiate a settlement on a claim.