The main function of the Financial Ombudsman Service is to arbitrate in disputes regarding claims settlements between:

The Financial Ombudsman Service (FOS) primarily serves to resolve disputes between private policyholders and insurers. This body provides an independent and impartial resolution mechanism for individuals who believe that they have not received fair treatment by their insurers regarding claims or policy issues.

Private policyholders often lack the resources or expertise to resolve disputes directly with large insurance companies, which can put them at a disadvantage. The FOS steps in to ensure that complaints are heard and addressed fairly, helping to protect customer rights and maintain trust in the insurance market.

The other choices focus on interactions that typically do not fall under the FOS's remit. For instance, disputes involving large commercial policyholders might require more specialized adjudication or legal processes, which are outside the scope of the Financial Ombudsman Service. Similarly, the FOS is not a mediator between policyholders and the regulator; its role is instead focused on facilitating resolutions between consumers and insurance providers.