Ideas to help BOJ set market conduct rules, protect finco customers
THE BANK of Jamaica (BOJ), now the ultimate and de facto deposittaking institution (DTI) and non-deposit-taking institution (non-DTI) regulator, will have ‘to get in the weeds’ if it is to fulfil its mission to eventually formulate standards and implement market conduct and consumer protection regulations for which the public has been crying out for a long time.
Getting in the weeds means the regulator must be concerned with minute details of the consumer experience and the service delivery process while still seeing the bigger picture.
The Financial Services Commission (FSC) has never been a consumer-centric regulator. It has always displayed what I call symptoms of weed-avoidance disorder and a lack of clarity about its mission. These ailments have contributed to the blunders to which my February 4 essay referred.
Consumer and regulatory issues about the insurance industry make up about three quarters of the 1,089 articles that I have researched and written about in this newspaper for over 27 years. Perhaps I meet bestselling author Malcolm Gladwell’s 10,000 hours of practice standard described in his 2008 book,
Outliers: The Story of Success.
Incidentally, the FSC’s first head, Bryan Wynter, asked me to speak with insurance industry leaders about market conduct regulation shortly after he assumed office.
The importance of the BOJ’s mission, coupled with my history of interest in these subjects, are the motives behind my decision to return to this topic two weeks later.
The judicial system and the National Health Fund (NHF) were omitted from the list of local institutions that I suggested that the Central Bank consult in the development of standards, market conduct and consumer protection regulations for DTIs and nonDTIs. These two institutions – that were the topics of earlier articles I wrote – are important players in the service game. The government’s public sector modernisation division (PSMD) in the Office of The Cabinet, I learned from a January 2, 2024, article in this newspaper is another. They have also entered the contest with a service excellence programme.
The PSMD plans to use a mystery shopping tool to set standards for the delivery of services in government ministries, departments, and agencies in a manner that effectively satisfies customers needs and provides values for citizens.
The Office of Utilities Regulation (OUR) also employs a similar strategy with the utilities it supervises.
A February 11 public notice suggests that the Judiciary’s attempts to improve the quality of service it dispenses is more advanced than those of the PSMD. My July 25, 2020 Sunday
Gleaner article, ‘Hidden insurance Claims backlog: What Chief Justice (CJ) Bryan Sykes can teach insurers’, discussed the CJ’s vision for Jamaica - “To have the best court system in the Caribbean in three years and one of the world’s best in six years.”
It also provided information about the courts’ efforts to reduce the backlog of cases in the system and to dispose more efficiently of other cases.
Four years later, a docket pilot for negligence claims which comprise almost 60 per cent of the total claims filed in the high court civil division annually and are among the claims with the highest incidence of backlog began on January 8. The pilot project is ‘aimed at providing targetted intervention for more robust management of these claims to enable their timely disposition.’
Many of the negligence claims, I suspect, result from motor vehicle accidents. I have seen no evidence that members of the motor insurance industry are doing things differently to improve the efficiency in how motor claims, for example, are managed, despite the FSC’s February 2019 market conduct guidelines and new rules that were gazetted under t he Insurance (amendment) Regulations of December 31, 2022.
Below are excerpts from my October 16, 2021, article, Lessons for insurers from NHF service. ‘Last Monday I decided on a whim to contact NHF to find out about its card-reissuing process. I visited the fund’s website and decided to engage in an online chat. The service provider was Monique. She was friendly, professional, and helpful. I learnt that the process would take a maximum of 15 minutes of waiting time once I completed an application form. To my surprise, I received a transcript of the online chat in an email a few minutes after the chat ended.
‘On my visit to the NHF in New Kingston, I encountered two security guards in the parking lot. Both were helpful and courteous. Another one greeted me at the entrance to the building. He took my temperature, sanitised my hands, and directed me to reception where I received instructions on where to find the fund’s customer service area. Another security guard who was sitting outside the area stood up on my approach, showed me a sanitiser and told me to sanitise once again.
‘As I entered the area, a gentleman, Mr Franzham, got up from behind a counter, opened a door and approached me. He examined the form that he had previously handed me and told me that I had omitted to sign it, and then returned behind the counter.
‘I signed the form and then handed it back to Mr Franzham. The time was 10.20 a.m., according to my phone. I sat down about six feet away from another customer who was there before me.
‘I barely had time to examine my surroundings, which was decorated to mark customer service week, when my name was called for me to collect my replacement card. The time that had elapsed since I surrendered the old card and was handed the new one was six minutes. Accompanying the new card was a letter signed by the customer care manager Sacha Blake.
‘Many thoughts crossed my mind as I left the building. Among them were the following:
• NHF does not charge for the public services that it provides. It is a government entity, yet the quality of its service, based on my experience, exceeds that of many local private sector entities, like banks and insurance companies, who are paid to deliver services. What are the reasons for this?
• What is it that the NHF’s board, senior management, and employees are doing, or not doing, that other companies can emulate?
• Would policyholders have more trust i n insurance and insurance providers if they consistently delivered service of the quality that I experienced at the NHF last Monday?’
Bernard Schneider and David E. Bowen in their book, Winning the Service Game, write, “The customer has expectations about how the interaction with the service deliverer will unfold. Will the service be delivered quickly, competently, courteously? Will t he service delivery person have the necessary tools to provide the service? Does the service encounter occur in a physical setting that fits the nature of the service being delivered?”
When I began the process that led to the reissue of my NHF health card I had no idea where it would end. Happily, I learned it provides a connection to last week’s column, ‘Hidden Insurance Claims Backlog: What Chief Justice Sykes Can Teach Insurers’.
It turned out the NHF can also teach them a thing or two.
This record of my NHF experience provides an incomplete picture. I am obviously ignorant about the many things that operate behind t he scenes that affect service delivery. It is my hope that this analysis of those interactions will provide insights to BOJ and help them get into the weeds to fulfil their mission to consumers – something banks and non-DTIs appear unwilling or unable to do.
If you require assistance managing risks or solving insurance problems, Cedric E. Stephens offers free counsel and advice. To obtain information and counsel, please write to The Business Editor at business@gleanerjm.com or contact Mr Stephens directly at. Letters and e-mails will be edited for clarity and length.