Policyholder protection

On a daily basis, insurance companies provide millions of services, claims processing, damage assessments, indemnities, etc.; most often, all these procedures are satisfactory for both the policyholder and the insurer.

However, there may be errors or different criteria between the policyholders, beneficiaries, injured parties, etc., and the insurance company. As a result there may be queries, complaints or appeals.

The legislation establishes procedures for resolving any disputes that may arise between the parties.

How is an insurance complaint made?

Making a complaint is a basic right that the insurance consumer has, as with any other product or service. If a problem or complaint arises in the relationship between the policyholder and the insurer, either due to the processing of a claim or any other aspect, the following channels can be used to formalize the complaint (irrespective of the possibility of going directly to court):

1. Customer Service or Complaints Department.

This is the administrative unit of the insurance company that collects and resolves, in the first instance, any customer complaints and claims.  All insurance companies are obliged to have this department and to respond to complaints and claims that may arise in their business.

If the policyholder is satisfied with the company’s response, this is the end of the complaint process.

2. Policyholder’s Ombudsman

In some insurance companies, in order to deal with customer complaints, there is the figure of the Policyholder’s Ombudsman, an entity that is independent of the insurance company. It is usual to first contact the Complaints Department and, if the claimant is not satisfied with the response, they can turn to the Policyholder’s Ombudsman.

The decisions of this body are binding on the insurance company (within certain limits), but not on the claimant, who, if not satisfied, may pursue other avenues of complaint such as the arbitration system.

3. Arbitration System

The arbitration system is a voluntary means of conflict resolution, specifically for consumers and users, which is supervised by the authorities. Arbitration decisions are usually binding for the parties, although the possibility of resorting to ordinary judicial proceedings is not completely ruled out.

4. Supervisory Bodies

Countries with a mature financial system have special bodies dedicated exclusively to regulating and supervising insurance companies and, therefore, guaranteeing that their activity is carried out properly.

The bodies that supervise the Spanish financial system are the Bank of Spain, the National Securities Market Commission and the Directorate General of Insurance and Pension Funds. These bodies have Complaints Services to which citizens can turn to to report any incidents that may arise.

In the case of insurance in Spain, it is the Directorate General of Insurance and Pension Funds (Dirección General de Seguros y Fondos de Pensiones; DGSFP), which deals with queries related to insurance contracts and pension plans arising from the actions of insurance companies, pension fund managers and insurance mediators.

A formal complaint can therefore be filed with this supervisory body under the requirements established by law.

To file a complaint or claim with the complaint service of the Directorate General of Insurance and Pension Funds, it must have been previously filed with the customer service department, or the policyholder’s ombudsman of the insurance company, and either it must have issued a resolution that does not satisfy the policyholder, or one month has passed with no response.