FSCL Case Study

Bryan, an experienced mariner, noticed damage to his yacht when it was moored at a marina. 

Fortunately, Bryan had insurance. There was some dispute with the insurer around the cause of the damage. However, in the end, the insurer agreed with Bryan and paid him nearly $43,000 in settlement of his claim (including the time Bryan spent on his own claim).  

However, Bryan was not happy. He did not feel that the insurer had acted in an honourable way and said it had breached the law. Bryan wanted the insurer to pay him $150,000 in punitive damages and complained to FSCL.  

FSCL did not uphold Bryan’s complaint, finding that the insurer had provided Bryan with a high standard of customer service and had not breached any applicable laws.

Bryan then raised concerns about his insurance broker who had assisted him with the marine insurance claim. Bryan alleged that the broker had brought disrepute to the insurance industry by not responding to his questions and terminating the business relationship. He complained that the broker had effectively withdrawn an apology made to him by saying they considered Bryan’s comments were unfair and unfounded.

The broker referred Bryan’s complaint to FSCL. They made a without prejudice offer to pay Bryan $2000 compensation for inconvenience, which he rejected.

Bryan wanted FSCL to investigate the broker’s conduct, ethics, and compliance with the Fair Insurance Code. Bryan complained that the broker misrepresented his position to the insurance company. When Bryan voiced his concerns, the broker terminated the relationship. He wanted action taken against the broker, such as a public finding of the broker’s guilt. 


Upon review, as Bryan was not claiming for any financial loss, FSCL agreed with the broker that their offer was reasonable. The scheme wrote to Bryan declining to investigate his complaint because the broker had offered him the maximum compensation FSCL could award for non-financial loss ($2000). While FSCL acknowledged there had been relationship difficulties between the parties, it noted an investigation would be unlikely to find the broker had caused sufficient inconvenience to warrant compensation of $2000.

It also found that terminating a relationship with a client was the insurance broker’s commercial judgement decision and FSCL was unable to look behind the broker’s decision to terminate their relationship with Bryan. Further, insurance brokers are not subject to the requirements of the Fair Insurance Code. 


Bryan noted that FSCL does not publicise its decisions against scheme participants and agreed to accept the settlement offer for $2000 in final settlement of his complaint.  

FSCL can decline to consider complaints where it considers that a scheme participant has made reasonable efforts to settle a matter with a complainant.

FSCL is a dispute resolution scheme whose powers are compensatory, rather than punitive, in nature. The scheme cannot take professional disciplinary action against financial advisers and brokers.

In cases where there is no direct financial loss, FSCL is limited to an award of compensation not exceeding $2000 for non-financial losses as a result of a participant’s actions, such as stress and inconvenience.

March 2019

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