THE FINANCIAL OMBUDSMAN SERVICE
1. HISTORY AND FORMATION OF THE FOS
IOB and FOS
Page 37113.1 The Insurance Ombudsman Bureau (“IOB”) was founded in 1981 by three leading insurance companies as a type of alternative dispute resolution service outside of the court system, to resolve complaints by customers against insurers who were members of the scheme. It was a voluntary, industry, non-governmental initiative, at a time when there was no regulator for the conduct of investment or insurance business. Most insurers opted to join the scheme. The law did not have to be applied strictly in the interests of resolving the disputes fairly. The system was also quicker and more economic than the court alternative for dispute resolution, especially in a time before the Woolf reforms. In 2000 the Financial Services Authority (“FSA”) was established as a single financial regulator for most types of large financial businesses, and various separate ombudsman schemes, including the IOB, merged to become the Financial Ombudsman Service (“FOS”).
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