AFCA predicts ‘much lower’ claims handling | Australian Markets

The Australian Monetary Complaints Authority (AFCA) has defended and sought to make clear its claims handling prices within the face of issues generated by an actuary’s report forecasting a ‘huge’ increase with impacts on the Compensation Scheme of Final Resort funding.

The AFCA says it expects its prices to be decrease than these indicated by the CSLR actuary’s report.

The Monetary Recommendation Affiliation of Australia (FAAA) had expressed concern that a CSLR actuarial forecast recommended that AFCA’s prices for handling claims would escalate from $12,450 per declare in 2024/25 to $21,334.

Reacting to the issues raised by the FAAA, AFCA chief working officer, Justin Untersteiner identified that, in keeping with the CSLR laws, AFCA is a not-for-profit organisation and “we are recovering our costs and no more this work”.

He additionally confused that the actuarial determine supplied with respect to the CSLR was a projection – “an estimate based on its assumptions, including about the cost of AFCA determinations that are yet to be finalised”.

“Estimates made by the CSLR are a matter for the CSLR, however our estimate of the cost per determination for the period in question is much lower than the assumption in the report,” Untersteiner stated in response to a report of the FAAA’s issues.

“Our aim as we continue to do this work is to develop further efficiencies of scale that will lead to lower costs per complaint. We are confident this will happen.”

“We are aware of the industry’s wish to keep the costs of the CSLR to a minimum but also that the industry has called for these complex matters to be addressed in a rigorous and robust way,” Untersteiner stated. “We continue to balance those considerations.”