Proposed Guideline on Complaint-Handling Procedures for Trust and Loan Companies and Insurance Companies
Introduction
1. The Financial Consumer Agency of Canada (FCAC) has developed a Guideline on Complaint-Handling Procedures for Trust and Loan Companies and Insurance Companies (Guideline). It sets out expectations with respect to trust and loan companies', foreign trust and loan companies', insurance companies' and foreign insurance companies' (Company or Companies) implementation of the complaint-handling provisions in the Trust and Loan Companies Act and the Insurance Companies Act and corresponding regulations.Footnote 1
2. This Guideline reinforces FCAC’s expectation that other federally regulated financial entities, such as trust and loan companies and insurance companies, review the Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks to develop and improve their policies and procedures for complaints-handling.Footnote 2 It aims to support Companies to enhance their complaint-handling practices to align with several of the banks’Footnote 3 complaint-handling requirementsFootnote 4 as well as sound practices.
3. Part VIII of the Trust and Loans Companies Act and Part VIII of the Insurance Companies Act set out the provisionsFootnote 5 that apply to Companies for dealing with complaints made by any personFootnote 6 who is an actual or potential customer of those Companies (Consumer).
4. The Guideline establishes FCAC’s expectations that Companies operationalize the requirements to establish procedures for dealing with complaintsFootnote 7 and requirements to file procedures with the Commissioner.Footnote 8
5. FCAC expects a Company to consider a complaint to be a dissatisfaction, whether justified or not, expressed to a Company with respect to a product or service that is requested or received in Canada from the Company or the manner in which a product or service is requested or received in Canada.
6. A Company is responsible for ensuring it meets the requirements set out in the Trust and Loan Companies Act or the Insurance Companies Act and regulations, as applicable.
7. A Company must ensure that Consumers have access to the Company’s complaint-handling Policies and Procedures (Policies and Procedures).
8. FCAC recognizes that a Company may tailor its Policies and Procedures to align with the nature, size and complexity of its business, distribution channels, and products and services.
9. This Guideline should be read in conjunction with all applicable legislation and regulations.
II. Key principles
10. A Company’s directors and the committee of the board—or, in the case of a foreign insurance company or foreign trust and loan company, its senior management—must, as applicable, oversee the establishment and implementation of complaint-handling Policies and Procedures. In establishing the Policies and Procedures, FCAC expects a Company will be guided by the following principles:
Effectiveness
FCAC expects a Company’s Policies and Procedures to be comprehensive and implemented to deal with Consumer complaints in a fair and consistent manner.
Timeliness
FCAC expects a Company’s Policies and Procedures to ensure the Company deals with complaints promptly and without unnecessary delays.
Accessibility
FCAC expects a Company’s Policies and Procedures to be easy for Consumers to locate, navigate and understand.
III. Effective complaint-handling Policies and Procedures
11. FCAC expects a person seeking to incorporate, or a body corporate seeking to continue to operate as a Company, to provide a copy of its Policies and Procedures to FCAC within the timelines specified during the application process.
12. When a Company amends its Policies and Procedures, it must file a consolidated version of the amended Policies and Procedures with FCAC as soon as the amendments are approved internally.
13. FCAC expects a Company’s Policies and Procedures to support consistency in decision-making, with redress provided as appropriate.
14. FCAC expects Company’s Policies and Procedures to ensure that all complaints are dealt with in a fair and consistent manner at all stages of the complaint-handling process.
15. To be effective, FCAC expects a Company’s Policies and Procedures to:
15.1. establish clear roles, responsibilities and accountabilities for all officers or employeesFootnote 9 involved in complaint-handling
15.2. include mechanisms for soliciting regular feedback from Consumers at all levels of the Company’s complaint-handling process
15.3. include a process for monitoring and testing Policies and Procedures and updating them as required
15.4. ensure that all complaints are dealt with in a fair, consistent and objective manner, and provide redress as appropriate
15.5. ensure that all employees who deal with complaints follow the Company’s Policies and Procedures
15.6. include an analysis of complaint data, to identify opportunities to better serve Consumers and to strengthen compliance with market conduct obligationsFootnote 10
Designating employees
16. A Company must designate 1 employee in Canada to be responsible for implementing its Policies and Procedures.
17. A Company must also designate 1 or more employees in Canada to receive and deal with complaintsFootnote 11 (Designated Employees). A Company may designate any employee whom it deems appropriate.
18. The employee whom a Company designates to be responsible for implementing its Policies and Procedures and the Designated Employee who holds the most senior position for dealing with complaints (the Senior Designated Employee) can be the same employee. FCAC expects the title and responsibilities of any Designated Employee to reflect that the position deals with complaints on a regular basis.
19. FCAC expects all Designated Employees to have the experience, competencies and authority required to deal with complaints, including resolution.
Training
20. FCAC expects a Company’s Policies and Procedures to include:
20.1. initial and ongoing formal training on complaint-handling for all employees who deal with complaints
20.2. a system for monitoring the status of employee training
20.3. mechanisms to measure and test the effectiveness of training
20.4. timelines and processes for reviewing training on a regular basis to ensure accuracy and for updating training in a timely fashion, as required, particularly in the event of:
- a change in the independent organization dealing with complaints (IO)
- changes to legal requirements
- changes to internal Policies and Procedures
21. FCAC expects a Company’s training for Designated Employees to reflect the employees’ specific roles and responsibilities.
22. FCAC expects a Company to allocate sufficient financial, technological and operational resources to implement an effective complaint-handling training program.
Systemic issues
23. FCAC expects a Company’s Policies and Procedures to include mechanisms for identifying and remedying any recurring or systemic problems by:
23.1. addressing the underlying reason behind the complaint and taking corrective action, where appropriate
23.2. tracking and analyzing the causes of individual complaints to identify the root causes that are common to various types of complaints
23.3. addressing whether such root causes may also affect other processes, products or services
23.4. addressing whether other Consumers may have potentially suffered detriment from such root causes
Redress and reimbursement
24. FCAC expects a Company’s Policies and Procedures to include a comprehensive redress policy that supports redress and reimbursement.
25. FCAC expects Policies and Procedures to ensure that a Company can provide its Consumers with redress and reimbursement for financial and non-financial impacts in a timely manner that is in keeping with, and based on, the circumstances of the complaints.
26. Where a recurring or systemic issue has been identified, FCAC expects Policies and Procedures to ensure that the Company provide redress and reimbursement to all affected Consumers.
IV. Timely complaint-handling Policies and Procedures
27. FCAC expects a Company’s Policies and Procedures to document the following potential outcomes when dealing with a complaint:
27.1. a Company can deal with a complaint by resolving it to the satisfaction of the person who made it (Resolve)
27.2. a Company can deal with a complaint by closing it if the Company is unable to Resolve the complaint to the satisfaction of the person who made it (Close)
28. FCAC expects a Company’s Policies and Procedures to include clear steps that ensure it Closes or Resolves complaints within 56 days after the day on which the complaint is received.
29. FCAC expects a Company’s Policies and Procedures to include that the period to Close or Resolve the complaint begins on the day the complaint is first communicated to the Company, by whichever channel.
30. FCAC expects a Company to review complaints in a manner that accounts for their nature and circumstances for each complaint. It should do so as quickly as is appropriate, and with particular attention to the length of time a Consumer spends at each step in the complaint-handling process.
Period for dealing with complaints
31. FCAC expects a Company to identify in its Policies and Procedures the timeframe for referring complaints that have not been Closed or Resolved to a Designated Employee in a timely manner.
32. To be considered timely, FCAC expects the timeframe for referral to not exceed 14 calendar days from the date on which the complaint is first communicated to the Company.
33. FCAC expects that any employee may deal with complaints if they are the first point of contact between the Company and the Consumer, regardless of the channel through which the complaint is communicated to the Company (for example, in person, online or over the phone).
34. If an employee other than a Designated Employee cannot Resolve or Close a complaint within the timeframe for referral identified in the Company’s Policies and Procedures, FCAC expects that they will refer the complaint to a Designated Employee.
35. If an employee other than a Designated Employee requires input or assistance from a Designated Employee to do so, FCAC expects the complaint to have been referred to a Designated Employee.
36. Once a complaint has been received by or referred to a Designated Employee, FCAC expects the complaint will continue to be dealt with by a Designated Employee until the complaint is Closed or Resolved. However, this does not preclude the possibility of continued interactions between the Consumer, the Designated Employee, and an employee who is not designated.
V. Accessible complaint-handling Policies and Procedures
37. FCAC expects a Company’s Policies and Procedures provided to ConsumersFootnote 12 to describe:
37.1. how the Consumer can complain to the Company through different channels
37.2. the Company’s complaint-handling process and the action(s) that will follow
37.3. that the Consumer can submit a complaint to the IO dealing with complaints if:
37.3.1 the complaint is not dealt with within 56 days
37.3.2 the Consumer is not satisfied with the resolution offered by the Company’s most senior Designated Employee
37.4 how to contact the IO dealing with complaints
37.5 how to contact FCAC
38. FCAC expects a Company’s Policies and Procedures to ensure that all employees who deal with complaints are able to help Consumers navigate the Company’s complaint-handling process, including referring their complaint to the IO.
Providing information to Consumers
39. FCAC expects a Company to be able to demonstrate that it has taken appropriate steps to give Consumers the information and documentation—such as contracts, agreements, and records of correspondence—that they need to meet the requirements set out in the Company’s Policies and Procedures.
40. FCAC expects a Company’s Policies and Procedures to ensure that all Employees involved in handling complaints know and understand the Company’s disclosure obligations to Consumers under the Trust and Loans Companies Act or the Insurance Companies Act, and corresponding regulations, as applicable.
41. FCAC expects a Company to provide information on its website(s) annually (or in writing when responding to a request) including the following:
41.1. the number of complaints that its Senior Designated Employee dealt with that year, including the number of complaints Resolved or Closed
41.2. the average length of time the Company took to deal with those complaints, from the first interaction with the Consumer to the date on which the complaint was Resolved or Closed
41.3. the products or services to which the complaints are related
41.4. a description of the nature of the complaints, beyond the related product or service information contained in the classification
41.5. the number of Resolved complaints
42. A Company can respond to a request for information electronically if the request is submitted that way or if the Consumer consents to receive electronic documents.Footnote 13
43. FCAC expects the information a Company provides to Consumers about its Policies and Procedures to be accurate and uses language that is clear, simple and not misleading.
Acknowledging complaints
44. FCAC expects a Company to acknowledge receipt of each complaint without delay, in writing, regardless of the channel through which it was communicated (for example, in person, online or over the phone).
45. A Company can acknowledge a complaint electronically if it was submitted that way or if the Consumer consents to receive electronic documents.
46. FCAC expects a Company to document and track complaints to their final decisions and provide Consumers with comprehensive, up-to-date information in a timely manner upon request.
Dealing with complaints when the Consumer has not provided their name
47. When a Company receives a complaint from a Consumer who has not provided their name (for example, a complaint submitted through social media using a nondescript handle), FCAC expects the Company to respond and provide the Consumer with the opportunity to access the Company’s Policies and Procedures. If that Consumer then decides to provide their identity, the Company should deal with the complaint according to its Policies and Procedures.
48. When a Company provides its Policies and Procedures to a Consumer who has not provided their name, and the Consumer still does not reveal their identity, the Company is not expected to refer the complaint to a Designated Employee.
Substantive written response
49. FCAC expects a Company to provide a substantive written response to the Consumer, without delay, when a complaint is:
49.1. Closed by an Employee other than a Designated Employee
49.2. Closed or Resolved by a Designated Employee
50. FCAC expects the substantive written response to provide all the information a Consumer needs to make an informed decision on whether to submit the complaint to a Company’s IO, if they so choose, including:
50.1. the date on which the complaint was communicated to the Company
50.2. the fact that the timeframe for dealing with complaints, identified in the Company’s Policies and Procedures, has been reached and that the Company was unable to Resolve the complaint within that period, if applicable
50.3. a statement of facts relating to the complaint
50.4. the Company’s final decision and offer, if any, in response to the complaint, as well as any relevant information about how the final decision was reached
50.5. the method used to calculate redress (monetary or non-monetary), if applicable
50.6. the Consumer’s right to submit the complaint to the IO dealing with complaints, and how to contact that organization
VI. Administrative processes and controls
51. FCAC expects a Company to maintain a record of every complaint a Designated Employee receives directly or has referred to them, using the template in Annex A of the Regulatory Reporting Guide for Trust and Loans Companies, Insurance Companies and Retail Associations (Reportable complaints summary report for consumer provisions(PDF)).
52. A Company must report complaints to FCAC in accordance with the Regulatory Reporting Guide for Trust and Loans Companies, Insurance Companies and Retail Associations.
VII. Miscellaneous
53. Questions relating to this Guideline can be sent by email to compliance@fcac-acfc.gc.ca or by mail to:
Financial Consumer Agency of Canada
Attention: Deputy Commissioner, Supervision and Enforcement Branch
427 Laurier Ave West, 5th Floor
Ottawa, ON K1R 5C7