Insurance and Financial Services Ombudsman

by Alan Knowsley - Rainey Collins Lawyers

The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) is free and independent and handles complaints from customers about financial service providers. Complaints can be about loans, superannuation, health and life insurance, car insurance, contents insurance, house insurance and investments.

One of the common disputes the IFSO deals with is alleged non-disclosure to the insurer of all material information.

An insured has a duty to disclose to the insurer all information which a prudent insurer would consider material. Things are material if the insurer’s decision to issue insurance or on what terms would be influenced by the information. The insured’s duty is breached even if the non-disclosure is unintentional. It is very important to disclose all material information because non-disclosure allows the insurer to avoid the policy (no pay claims) and keep the premiums. Common things people “forget” to disclose are past medical conditions, driving offences, past claims, prior declined cover, modifications to vehicles e.g. mag wheels make a vehicle more of a target for thieves so premiums will be higher. Non disclosure means you may lose your cover.

The IFSO when investigating claims relating to non-disclosure often provides independent underwriters with the information disclosed and asks if the non-disclosed information would have altered the decision to offer insurance or the terms (e.g. exclusions or price). If the missing information would not have made a difference then it is not a material non-disclosure.

You can find out if your insurer or financial services provider is a member of the scheme on the Ombudsman’s website

Before you go to the IFSO you need to have gone through your provider’s internal disputes resolution process. If you cannot resolve matters internally you should ask for a notice of “deadlock”. You provide this notice to the IFSO to show you have completed the provider’s internal process.

If your provider is a member of the IFSO scheme you can complete the IFSO complaint form. Send that in with your notice of deadlock and any other supporting documents to the IFSO by post or email (PO Box 10-845, Wellington 6143 or

Once the IFSO receives your complaint they will obtain your file from your insurer and make any other inquiries. A Case Manager will investigate your complaint, discuss issues with you and get any expert assistance they need.

The IFSO may try to resolve your complaint by negotiating mediation or conciliation. The IFSO provides the conciliators and mediators and they will ensure any resolution is fair and reasonable.

If a resolution is not agreed the Case Manager will make a decision on the outcome of your complaint. If both parties accept the outcome this becomes final. Either party can request the IFSO to review the outcome if new information or grounds exist. The IFSO will not review the matter just because you don’t agree with the outcome.

If you do not accept the outcome you can take your dispute to the Disputes Tribunal or to Court. The IFSO’s Award is binding on your insurer/financial services provider and they must comply with the outcome. You are entitled to be represented throughout the IFSO investigation process.

For more information on this topic, please contact the Rainey Collins office (
04 4736850) or the article author - Alan Knowsley.

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