Since April 2019, firms that handle insurance claims for customers for a fee in England, Scotland and Wales have been regulated by the Financial Conduct Authority as claims management companies. Most loss assessing practices are therefore FCA-regulated businesses, with the obligations that follow: clear pre-contract information, a written agreement, fair communications, proper records, a complaints procedure and a culture of treating customers fairly. None of that is new to a well-run practice. What is new, for many, is that the regulator can ask to see it. This article is about the systems side: what your records, your client communications and your software need to do so that compliance is a by-product of running claims well, not a separate job. It is a practical guide, not legal advice; the rules themselves are in the FCA Handbook’s CMCOB sourcebook, and your compliance adviser should have the final word.
1. One file per claim, with everything on it
The regulator’s first question in any review is “show me the file”. A compliant file is one where the agreement, the fee disclosure, the correspondence with the customer and the insurer, the documents received, and the notes of every call sit in one place, in date order, with nothing in a personal inbox. If your claims system holds the claim record, the documents and the message timeline together, the file is always ready. If it holds the record and the documents live in a shared drive, you have two files and a reconciliation problem.
What to look for: every email sent from the system is logged on the claim; uploaded documents carry the date and who uploaded them; call notes are a field, not a habit.
2. Pre-contract information and the signed agreement
Before a customer signs, they must be told clearly what you will do, what it will cost, how the fee is calculated, that they could pursue the claim themselves or through other routes, and how to cancel. That information and the signed agreement belong on the claim before it leaves the first stage.
What to look for: a stage gate. A claim cannot move past first notification until the agreement is uploaded and the pre-contract information is marked as sent. Software that makes the gate a checklist item rather than a memory removes the most common gap in a file.
3. Communications that are clear, fair and not misleading
Every message to a customer, including the automated ones, is a regulated communication. That is an argument for automation, not against it: a message written once, reviewed once and sent the same way every time is easier to keep fair than fifty improvised emails. The messages that go out at each stage should say what has happened, what happens next and what, if anything, the customer needs to do, in plain English, without promises about outcomes or timescales you do not control.
What to look for: templates you can review in one place; a log of exactly what each customer received and when; no stage message that states or implies a likely settlement.
4. Calls
CMCOB requires certain calls with customers to be recorded and kept, and all calls to be noted on the file. If your practice does its first contact and its sales conversations by phone, make sure the recording and retention arrangement is in place, and that a note of every call, recorded or not, lands on the claim with the date and the outcome.
What to look for: a phone system that logs calls against the contact and, through the contact, the claim; or at minimum a call-note field that staff actually use because it is on the same screen as the claim.
5. Complaints
You need a written complaints procedure, you need to tell customers about it, and you need to handle complaints within the regulator’s timescales and tell the customer about the Financial Ombudsman Service at the right point. Operationally, a complaint is a claim-like object: it has a date received, a deadline, correspondence and an outcome.
What to look for: a way to flag a claim as having a complaint attached, with a deadline that raises an alert, and the complaint correspondence on the same timeline as everything else.
6. Vulnerable customers
A policyholder whose home has flooded is, that week, a vulnerable customer, and the regulator expects you to recognise and respond to that. In practice it means flagging the file, adjusting how and how often you contact them, and making sure automated messages do not land badly: a reminder to upload receipts the day after a bereavement is the kind of thing a flag should prevent.
What to look for: a vulnerability flag on the contact that pauses or softens automated sequences, and that staff can see on every screen.
7. Records and retention
Records have to be kept for the period the rules require and produced on request. The practical test: could you export a complete claim file, with its timeline and documents, as a single bundle, today, for a claim settled two years ago?
What to look for: export of a claim with its documents; retention that does not depend on an employee’s laptop; a data processing agreement with your software provider that says where the data is and who can access it.
8. Senior management and oversight
Someone in the practice is responsible for compliance and has to be able to show they oversee it. The board view of the claims pipeline is that oversight: claims by stage, by assessor and by age, with the stalled ones visible. A monthly look at that board, noted, is a control.
Putting it together
Done well, none of the above adds work. The agreement goes on the file because the stage gate asks for it; the communications are fair because they were written once; the calls are noted because the field is on the screen; the records exist because the system is the record. That is the standard ClaimFlow is built to, with the claim record, the timeline and the documents in one place, set out on the features page, and data handling covered in our privacy notice and terms.
Further reading
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