Institute of the Financial Commissioner as a tool for resolving insurance disputes

Kovrigin Anton Aleksandrovich Postgraduate student, Department of Civil Law, Synergy University 125190, Russia, Moscow region, Moscow, Leningradsky Prospekt, 80G Kaa_2000@mail.ru

The Federal Law "On the Commissioner for the Rights of Consumers of Financial Services" ^[2] (hereinafter – FZ No. 123-FZ) was adopted in 2018 and came into force in stages (the absolute majority of the provisions of the law came into force on September 5, 2018, separate legislative provisions from January 1, 2020 and January 1, 2021). Of course, less than a five-year period of validity of the regulatory legal act does not allow us to fully analyze the activities of a relatively new institutional structure and assess its effectiveness. However, the available open information on the status, powers, volumes and results of the financial commissioner's activities provides an opportunity both to analyze the interim results of the activities of the institutional structure and to conduct a comparative analysis of the legal situation of similar functional load structures in different countries. The relevant analysis is aimed at optimizing the legal regulation of the activities of the financial commissioner in the Russian Federation as a tool for resolving insurance disputes.

In the domestic scientific literature, attempts have been made to conduct a comparative legal analysis of the status and legal regulation of the activities of the financial commissioner from the perspective of national legal regulation and the status of the financial ombudsman in foreign countries. In particular, a similar study was conducted by A.V. Vishnevsky in 2018 ^[3] (i.e., the study was published almost immediately after the adoption of Federal Law No. 123-FZ) and M. V. Petrukhin together with A. N. Petrukhina in 2021 ^[9] (i.e., taking into account the three-year functioning of the institute in question). Taking into account the legal relations previously studied by domestic researchers in a comparative legal context, in this study it seems appropriate to pay fundamental attention to other aspects of the legal regulation of the activities of the financial commissioner. Thus, the author consciously focuses on individual points that have not previously been the subject of study in the scientific literature, which, of course, determines the absence of claims to the complex nature of the research being conducted. Also, taking into account that the previously published works within the framework of a comparative study study the regulation of the institute of the financial Ombudsman in the countries of the European Union, the author decided to focus on the foreign regulation of the activities of the financial ombudsman in other countries. Under the specified conditions, the acts regulating the activities of the Financial Ombudsman in Canada were chosen for conducting a comparative legal analysis. In addition, taking into account the object and subject of this study, attention is paid to the regulation of the activities of financial commissioners specializing in dispute resolution in the field of insurance legal relations.

In particular, the status of the Financial Ombudsman and the procedure for resolving disputes in the field of insurance legal relations in Canada are regulated by the Regulations of the Ombudsman Service for General Insurance ^[11].

Speaking about the legal regulation of the activities of the Financial Commissioner of Russia, attention should be paid to the implementation of the relevant legal regulation. When studying the regulation of the activities of the financial commissioner (within the framework of this study, it should be noted that the financial commissioner means the institution as a whole, and not a specific official) and correlating its individual provisions with certain aspects of their practical implementation, it can be stated that the requirements of Federal Law No. 123-FZ are not fully implemented, which is confirmed by the analysis of information from open sources.

For example, in accordance with the provisions of paragraph 9 of Article 2 of Federal Law No. 123-FZ, the specification of the areas of financial services for consideration of appeals within which the positions of financial commissioners are established falls within the competence of the Bank of Russia, and the relevant information (on the specification of areas and the establishment of relevant positions) should be posted by the Bank of Russia on the official website and duplicated on the website of the financial commissioner.

Meanwhile, a contextual search on the website of the Central Bank of the Russian Federation did not reveal relevant information (as of June 6, 2023) either on the website of the Central Bank of the Russian Federation ^[7] or on the website of the financial commissioner ^[8]. It seems that this state of affairs neither corresponds to the legal provisions established by special Federal Law No. 123-FZ, nor to the general requirements of the activities of executive authorities (for example, the principles of openness and publicity are indirectly enshrined in Part 2 of Article 24 of the Constitution of the Russian Federation ^[1]).

The scientific literature has repeatedly voiced such a claim to the legal regulation of the activities of the financial commissioner in Russia as the lack of legislative consolidation of special professional principles for the implementation of his activities ^{[3, p. 63]}. It should be additionally noted that in Federal Law No. 123-FZ there are not only special, professional principles for the implementation of the activities of the institution in question, but also special functional principles for the implementation of the duties (functions) assigned to the financial commissioner.

This conclusion is especially obvious when comparing the national legal regulation of the activities of the financial commissioner with its foreign counterparts. Thus, Federal Law No. 123-FZ mentions such general legal principles as legality, respect for rights as the principles of the financial commissioner's activity

For example, the study of the GIO Regulations ^[11] (Financial Ombudsman for General Insurance in Canada) allows us to identify the following professional principles of the financial Ombudsman: impartiality, professionalism, experience in the insurance industry and related sectors, lack of direct links with specific insurance companies or their boards of directors (preamble of the Regulations).

The following important provisions are fixed in the Regulations as functional principles of the Ombudsman's activity.

Firstly, the principle of a systematic approach in the interpretation of the Canadian legislator means the identification of the policies and/or practices of one or more property and accident insurance companies discovered during the consideration of an individual complaint that could lead to losses or inconveniences for one or more clients of the insurance organization, similar to that faced by the original applicant. Consequently, the activity of the financial commissioner is not initially limited to the resolution of an individual complaint and is focused on the elimination of systemic violations, and therefore on the optimization of the functioning of the insurance sector as a whole.

Secondly, the principle of confidentiality of information that has become known in connection with the resolution of an insurance dispute by the financial Ombudsman is quite deeply detailed in Canada. In addition to the ban objectively following from the principle of confidentiality on the use of procedural documentation compiled during dispute resolution by the financial commissioner, paragraph 20 of the Regulations ^[11], a similar ban is imposed on discussions and correspondence between the applicant, the insurance company and the GIO manager, Consumer Support staff and SAO, which are part of the GIO dispute resolution process. It should be noted that this prohibition applies not only to the disclosure of information by the parties, any information cannot be disclosed or used in any subsequent judicial or other proceedings or dispute resolution processes. GIO files are confidential and protected from disclosure for any purpose. In addition, the GIO Executive Director, GIO Complaints Manager, GIO, CSO and SAO employees cannot be called to testify in any subsequent court, other proceedings or dispute resolution processes, i.e. they actually have witness immunity.

Thirdly, a literal analysis of the provisions of the Regulations allows us to formulate a conclusion that the principle of the mediation nature of the dispute resolution process in the field of insurance legal relations should be attributed to the functional principles of the financial Ombudsman's activity.

Returning to the domestic legal regulation, it should be noted that the consolidation of similar principles would certainly have a positive impact on the genesis of the financial commissioner in the Russian Federation as a resolution of insurance disputes, however, at the present stage of development of Russian legislation, this is not possible due to the fundamentally different nature of the institution of the financial commissioner in Russia, compared with individual foreign countries (this issue requires additional justification, in connection with which it will be discussed below).

Summarizing the above, it should be noted that if the professional principles of activity can be deduced from the provisions of Federal Law No. 123-FZ from the fixed requirements for the financial commissioner, then the functional principles of the activity of the institution in question are simply absent in the analyzed regulatory legal act. Meanwhile, it is the special functional principles that determine the legal essence of the institution of state power authorized to consider appeals in any field.

An important feature of the legal status of the financial Ombudsman in Canada can be considered the ability to make non-binding recommendations, which allows you to flexibly contribute to the resolution of a dispute in the field of insurance legal relations.

The objectives of the financial commissioner's activities also differ significantly in the understanding of the domestic and Canadian legislator. In Federal Law No. 123-FZ, the specific purpose of the financial commissioner's activity is not defined, however, the following interpretation can be derived from the text of the regulatory legal act under consideration: consideration of the consumer's appeal as part of the pre-trial settlement of the dispute ^[5].

The Canadian legislator clearly states the purpose of the Financial Ombudsman for general insurance: "to use his extensive experience and understanding of the industry to work towards a fair solution between individuals and their insurance companies" ^[11].

In fact, we are talking about mediation that promotes reconciliation of the parties. And it is precisely this legal essence of the financial Ombudsman's activity that all its legal regulation testifies to. In particular, in accordance with the Regulations ^[11], the entire dispute resolution procedure by the Financial Ombudsman includes three stages: informal mediation to reconciliation (mediation by an employee (GIO manager), mediation (mediation involving a professional mediator) and dispute resolution by a Higher Court decision (it should be noted that the involvement of a senior judicial officer is a service employee the financial ombudsman, - occurs precisely within the framework of resolving the dispute under consideration by the relevant service, and not by the court in the generally accepted sense)).

Thus, it can be concluded that in domestic practice, the resolution of appeals by financial commissioners is focused mainly on screening out disputes that are "insignificant" in the context of the amount of property claims and unloading the judicial system ^{[6, p. 22]}, whereas in foreign countries, in Canada, in particular, the dispute resolution procedure by the financial Ombudsman is focused on it is for the resolution of the dispute, and not for the adoption of any preliminary decision as part of the pre-trial settlement of the dispute.

In the Russian Federation, consideration of an application by a financial commissioner is a mandatory stage of pre-trial settlement of an existing dispute (if it meets certain criteria) ^{[10, p. 21]}, whereas in Canada, consideration of an application (complaint) by a financial ombudsman for general insurance is explicitly called an alternative way of resolving a dispute, which follows from both a literal interpretation of the terminological apparatus of the analyzed Service Regulations the Ombudsman for General Insurance, and from the provisions of specific paragraphs of the Regulations governing the organizational and functional aspects of the Financial Ombudsman's activities (p. 10, p. 14 of the Regulations of the Ombudsman Service for General Insurance).

So, this study allowed us to confirm and detail the theses previously voiced in scientific periodicals about the lack of elaboration of the legal regulation of the institute of the financial commissioner in the Russian Federation ^{[4, p. 22]}.

The analysis carried out within the framework of this study allows us to formulate the following conclusions.

Firstly, the domestic institute of the financial Commissioner distorts the legal nature of the institution of the financial Ombudsman, transforming an alternative way of resolving the dispute into a mandatory stage of consideration of the appeal as a mandatory pre-trial settlement.

Thus, from an effective tool for resolving an insurance dispute, forming a systematic approach to resolving standard disputes and optimizing the insurance services market as a whole, the institution of a financial commissioner has been turned into a mandatory jurisdictional stage for considering insurance disputes of a certain category.

Secondly, the domestic regulatory framework regulating the activities of the financial commissioner does not include professional and functional special principles of activity, which, of course, is a significant omission of the national legislator.

If professional principles of activity can be deduced from the provisions of Federal Law No. 123-FZ from the fixed requirements for the financial commissioner, then the functional principles of the activity of the institution in question are simply absent in the analyzed regulatory legal act. Meanwhile, it is the special functional principles that determine the legal essence of the institution of state power authorized to consider appeals in any field.

Thirdly, when studying the regulatory and legal regulation of the activities of the financial commissioner and correlating its individual provisions with aspects of their practical implementation, it can be stated that the requirements of Federal Law No. 123-FZ are not fully implemented, which is confirmed by the analysis of information from open sources. For example, in accordance with the provisions of paragraph 9 of Article 2 of Federal Law No. 123-FZ, the specification of the areas of financial services for consideration of appeals within which the positions of financial commissioners are established falls within the competence of the Bank of Russia, and the relevant information (on the specification of areas and the establishment of relevant positions) should be posted by the Bank of Russia on the official website and duplicated on the website of the financial commissioner. Meanwhile, a contextual search on the website of the Central Bank of the Russian Federation did not reveal relevant information (as of June 6, 2023) either on the website of the Central Bank of the Russian Federation or on the website of the financial commissioner.

It seems that this state of affairs neither corresponds to the legal provisions established by special Federal Law No. 123-FZ, nor to the general requirements of the activities of executive authorities (for example, the principle of publicity is enshrined in Part 2 of Article 24 of the Constitution of the Russian Federation).

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