Insurance Mediation in France
Consumer Mediation in the insurance sector has a legislative basis in Article L 112-2 of the Insurance Code which, following Ordinance 2015-1033, requires explicitly insurers to specify in information documents made available to policy-holders the conditions in accordance with which complaints shall be processed and to offer mediation compliant with the Consumer Code (without prejudice to the right of the consumer to instigate judicial proceedings). Previously, since a 1994 Law, Article L 112-2 required insurers to specify in the same documents the conditions in accordance with which complaints shall be processed, and the fact that there exists within the company a body entrusted with such task.
The current characteristic of Consumer Mediation in the insurance sector is unification. Until the end of 2015, there were several mediators, in particular the Médiateur de la Fédération Française des Sociétés d’Assurances (Mediator of the French Federation of Insurance Companies). The companies of the FFSA had put in place in 1993 a free mediation scheme for policy-holders (and third parties). The FFSA mediator was appointed unanimously, for three years, renewable, by a board made up of the Presidents of, respectively, the Institut national de la consommation [National Consumer Institution], the Comité consultatif du secteur financier [Consultative Committee for the Financial Sector] and the FFSA (FFSA Mediation Charter, available p. 54 of the 2014-15 Report). His task was to investigate disputes between an insuree (private individuals only) and an insurance company after the internal dispute resolution procedures of such company had been exhausted. No matter could be submitted to him if litigation had been instigated or was underway (in case of submission the limitation period was suspended). The mediator issued a motivated opinion within three months, taking into account elements of law and equity with the aim of achieving an amicable solution. The opinion was not binding on the parties. The decision on whether or not to implement it was taken by the directors of the company and notified to the mediator, who informed the policy-holder that they could still instigate legal proceedings. The mediator received the assistance, funds and powers necessary to carry out his task independently. For example, companies had six weeks to respond to his requests for information. The success of the mediation was such that the Mediator was at times overwhelmed. In 2000, he dealt with around 500 requests for mediation but, in 2014, 12 000 requests (knowing that around 3000 cases that had been submitted prematurely were referred back to insurance companies’ internal complaint handling departments and were not subsequently sent back for mediation, and that nearly 800 cases did not fall within the ‘jurisdiction’ of the mediator (2014-15 Report p. 43 and 45)). Since 2002, the number of mediation requests has increased every year without any exception due to the ever-increasing preference for mediation over legal action, the continuation of the western economic crisis, significant changes in behaviour and the simple fact that consumers are more and more aware of the existence and advantages of mediation. Consequently, “In 2014 and 2015, the processing period for mediation cases was in excess of 3 months” (2014-15 Report p. 48). As for the results of mediation, in 2014, the mediator issued a formal opinion in nearly 1000 cases, i.e. it was not possible to identify a solution while the case was being examined during mediation (2014-15 Report p. 47). By contrast, “a satisfactory outcome is achieved for many cases with the assistance of the mediation services in what could be called the pre-mediation phase, i.e. before the mediator is constrained to issue a formal opinion to the parties. By far the majority of cases are settled before a formal opinion is issued – nearly 6,695” in 2014 (2014-15 Report p. 47). Interestingly, there has been a substantial evolution regarding the nature of the opinions delivered. Fifteen years ago, the proportion of favourable opinions to the consumer was at least equal to that of the non-favourable ones. In 2014, more than 70% of the opinions were not in favour of the customer. The mediator declares that one should rejoice himself in this state of affairs: an opinion which is not favourable to the consumer proves that the complaint was dealt with properly by the company’s internal complaint handling department, which is all the more remarkable given the very sharp rise in the number of complaints (2014-15 Report p. 52, where he adds: “On the other hand, a steady increase in the number of opinions in favour of the applicant would indicate a worsening of the quality of complaint handling within the undertaking concerned”. See also his interview at the end of his mandate (10 November 2015).
Today, FFSA mediation has been merged with other insurance mediation systems in order to form La Médiation de l’Assurance (Insurance Mediation). Insurance Mediation was created by an agreement between the Association française de l'assurance (French Insurance Association), the FFSA and the GEMA (Groupement des entreprises mutuelles d’assurance, or Group of mutual insurance companies — GEMA and FFSA had previously worked on a common Code of conduct, available p. 55 of the 2014-15 FFSA Report). Its purpose is to offer to the consumers an amicable mechanism, free of charge, for the resolution of disputes involving an insurance undertaking or an intermediary which adheres to the association (the very complete list) and to appoint a mediator, while ensuring that mediator’s independence. A Charter states the core principles of Insurance Mediation: independence of the mediator; a procedure which is free for the consumer, written, confidential and suspends time-limits; mediation is only available after the internal dispute resolution procedures of the company have been exhausted and if no legal action has been taken; the request for mediation must not be manifestly unjustified or abusive; companies have a maximum period of five weeks to respond to requests for information or documents issued by the mediator; the mediator has 3 months to deliver an opinion (in the exceptional case he needs more time he should notify both parties and justify the delay, knowing that no maximum delay has been set); it should be stated in each and every opinion of the mediator that it has been prepared taking into account elements of law and equity but also with the aim of achieving an amicable solution, in contrast with the decision of a Court; the opinion of the mediator is not binding (in 97% of the cases, parties follow the opinion of the mediator and where the company does not abide by the opinion, its top management is notified, according to the Insurance Mediator, as per M.-C. Sonkin, Médiation de l’assurance: le nouveau mode d’emploi, 21 January 2016). These rules may originate directly into legislation, and the website of Insurance Mediation also quotes basic provisions of the implementing measures of Directive 2013/11 in France. The first and current Insurance Mediator was appointed for three years in November 2015 (www.mediation-assurance.org/Organisation; he has a PhD in Law and extensive experience in the insurance sector). The committee responsible for appointing the Mediator is made up of the President of the Institut national de la consommation, the President of the Comité consultatif du secteur financier and the President of the Association française de l'assurance. Consumer organisations had long asked for a single Mediator, which they prefer to companies’ mediators. The insurance industry is said to have “seized the opportunity offered by [directive 2013/11] to finally unify mediation in the insurance sector and make the changes required to enable the mediation system to cope with its workload” (2014-15 Report, p. 40; on the hope that the changes should enable mediation to be carried out in accordance with the 90 days rule, see also the Report p. 48). One of the changes is the possibility of online application to the mediator and submission of supporting documents (www.mediation-assurance.org/Saisir+le+mediateur (bottom); up to 3 supporting documents may be attached). An application by post continues to be available. In both cases, the mediator will acknowledge the receipt of the application. In a praiseworthy manner, the FFSA mediator regularly insisted since a few years on the need to avoid the industrialisation of mediation: “All aspects of disputes must still be considered. Each case concerns an individual, even if the same type of case may be submitted for mediation repeatedly” (2013 Report, p. 39). Consequently, “Care must be taken to ensure that these [new] procedures do not remove the human element from the special relationship established between the mediator and the various stakeholders” (2014-15 Report p. 40 in fine).
Last but not least, the Insurance Mediation, in cross-border disputes, very usefully allows the consumer to write to it in French (or English), before transmitting the mediation request to the correct mediation scheme abroad and translating the opinion delivered before forwarding it to the consumer (www.mediation-assurance.org/Litiges+transfrontieres).
(Altalex, 30 May 2016. Article by Emmanuel Guinchard)