The proposed increased Financial Ombudsman Service (FOS) award limit is ‘not keeping pace'with today's costs, according to the (FOS).
The ombudsman also noted that protection related complaints are ‘so small as to be off the scale' and paid tribute to the industry's improved handling of disputes and recognised the passion of those working within the sector.
Speaking at the COVER Forum, Caroline Mitchell, lead ombudsman - insurance and investments at the FOS, commented that the protection market was not a source of great concern, especially when compared with other sectors such as payment protection insurance.
In 2009-10, 776 income protection, 598 critical illness and 652 private medical and dental complaints were received, almost unchanged from the previous year.
"If you think that last week we had 4,800 complaints in one week you will see that these numbers are so small as to be almost off the scale," she said.
"We have had a real improvement in complaint handling in this area over the last year or so. This follows a lot of work with the industry and Association of British Insurers in developing guidance and subsequently the codes of practice.
"This is a tribute to everything I've been hearing about the passion for which everybody seems to do their work in this sector of the industry," she added.
Mitchell also addressed the proposed increase in FOS awards limits from £100,000 to £150,000.
"Originally in Insurance Ombudsman Bureau (IOB) days, £100,000 was the biggest claim anyone could think could be made as it was the equivalent to the total loss of a house through fire or subsidence," she said.
"If you were to need to today could you replace that house anywhere in the country for £100,000, probably not - so even if it goes up to £150,000 it's still probably not keeping pace."
