##utable and responsible manner, there are a few that adopt questionable industry practices, oft - times exploiting the antiquated and grossly inadequate insurance legislation. as an example, in order to capture market share, some companies are prepared to under – price premiums, while operating with inadequate claims reserves. consequently, these companies face serious problems in meeting consumer claims. as a result, the bulk of the insurance complaints reaching the ombudsman are for unfair bis central bankers ’ speeches claims practices such as ; forcing legitimate claims to litigation ; under - payment of claims and unreasonable delays in paying claims. the new insurance act, which is currently before parliament, will seek to address this issue by requiring that every insurance company involved in general insurance carry a full - time actuary who will certify the adequacy of claims reserves. i would like to provide some thoughts about the way forward for the ombudsman scheme, but i would like to couch these against the background of the new global approach to financial sector stability espoused by the foremost authority on these matters – the group of g20 finance ministers and central bank governors. this approach says that traditional regulatory and supervisory frameworks adopted by oversight bodies are not sufficient for financial stability but rather should be complemented by “ strengthened, dedicated and proportionate policy action geared to enhance financial consumer protection ”. the g20 explains that the enhanced focus on consumer protection is made necessary by the increased complexity of financial products and rapid technological change, all against the background of the prevailing low level of financial literacy. the g20 emphasizes that these factors could increase the risk that consumers face with respect to fraud, abuse and misconduct. in particular, low income and less experienced consumers are more prone to these risks. in these circumstances, the g20 suggest that financial consumer protection should be integrated with financial literacy policies. the group calls for, inter alia, legal recognition of consumer financial protection, oversight bodies with the necessary authority and resources to carry out their mission, improved financial education, and adequate complaints handling and redress mechanisms. the g20 makes a number of specific recommendations but cautions that the approach should be tailored to the specific country circumstances. against this background, i would like to make three suggestions for upgrading our existing regime of financial consumer protection. firstly, it is time that the existing voluntary ombudsman regime be enshrined into law. while the voluntary arrangement confirmed the “ buy - in ” by the financial services firms, it limited

most notably, the osfo is now giving greater focus to financial education. the results achieved by the ofso since its inception have been formidable by any standard. the total number of complaints against the banks received by the ofso was, 585. however only 215 or less than 40 per cent fell within the “ terms of reference ”. it is interesting to note that, in the case of the commercial banks, the ombudsman scheme prompted the establishment on strengthening of formal internal dispute - resolution mechanisms. this, i would assume, has led banks to be more attentive to customer complaints so as to pre - empt the visit to the ombudsman. data provided by the banks themselves indicate that they handled internally close to two thousand complaints, between 2008 and 2011. the number of qualifying complaints against the insurance companies referred to the ombudsman office amounted to about 2000, over the period 2005 through 2011, the vast majority of which ( about 95 per cent ) related to motor vehicle insurance. unlike in the case of the commercial banks, we have no systematic information on the number of complaints handled internally by the insurance companies. a few companies have established formal dispute - resolution mechanisms. the majority, however, depend on informal ad hoc arrangements. the absence of effective internal mechanisms to deal with complaints may be one factor contributing to the larger number of complaints against the insurance companies. data from the ombudsman ’ s office point to a very impressive resolution rate of 94 per cent in respect of commercial bank complaints and 97 per cent in respect of insurance complaints. mr. douglas camacho alluded to it and i share the view that the large number of complaints against insurance companies compared to the banks may have much to do with the following three factors : i ) the more robust regulatory regime concerning the commercial banks, whose legislation is more current than that of the insurance sector ii ) a stronger compliance culture resulting from decades of central bank supervision, compared to only seven years for the insurance sector and iii ) the lower capital and entry requirements faced by the insurance sector and particularly the general companies. the area of motor vehicle claims presents by far the greatest challenge for the ombudsman ’ s office and is the area of greatest concern for consumers. of the close to 2300 complaints processed by the ofso over the past seven years, about two - thirds involve 5 of the 29 operating insurance companies. the inescapable reality is that, while most insurance companies operate in a rep