Billy Kelleher (Cork North Central, Fianna Fail)

I welcome the opportunity to speak on this Bill. I congratulate Deputy Michael McGrath for presenting it to the House. The previous debate reminded me that public trust and confidence in many of our institutions is at an all-time low as a result of the fall-out from the Mahon and Moriarty tribunals. Similarly, people have a reduced level of trust in the financial services sector now that a diminished level of responsibility is associated with it. We have a long way to go if we are to build trust in many areas of Irish public life. Confidence in the banking and financial services sector has been affected by what has happened in recent years.

The legislation before the House proposes that we support the request of the Financial Services Ombudsman for additional powers in punishing people who are found to have breached certain ethical regulations. Although this would be a small step in the overall financial services context - I refer to the amount of money that is paid out in compensation or recompense for wrongdoing - it would be a positive one. It would be a fundamental and integral part of the process of ensuring people have confidence in our financial institutions and the services they sell to the public.

There is no doubt that the services put together by the financial services industry are very complex and are becoming more complex as time goes by. In the UK, sub-prime mortgages were bundled and rolled and sold on again. That indicates what can happen at the upper echelons of the industry in the absence of proper regulatory oversight and, more important, penalties for misdemeanours. This idea was developed to the grave point at which it undermined the credibility and fabric not just of a single institution, but also of the UK economy itself. For all the reasons I have mentioned, this Bill is a small but practical part of the process of building confidence.

I wish to approach this issue from a demographic angle. Ireland is an ageing society. The older people strategy that is to be published will be an important step in ensuring the health services are in a position to put proper facilities, supports and services in place for older people in years to come. Recent increases in life expectancy mean that our demographically ageing population will live longer and healthier lives. As the population grows older, the demand for health insurance and financial packages and products to support people in retirement will increase. People may wish to plan ahead financially by saving for nursing homes or other supports and services they may need when they are older.

I am concerned that if we do not take positive steps to ensure the Office of the Financial Services Ombudsman has this additional power and authority, it will not be able to publish material highlighting areas of concern and exposing people, institutions and products that might not be living up to the standards we expect. It is clear from some of the complaints highlighted by the two previous speakers that older people can be vulnerable when complex service plans and insurance packages are presented to them. I believe we should bring the health insurance industry under the scrutiny of the Financial Services Ombudsman. The ombudsman should be in a position to assess the products that are provided and make sure cover is not diminished by stealth or by underhand activities.

I am concerned about the downgrading of the various plans that are being sold by our health insurers. There is clear evidence that the cover now being offered in areas like ophthalmic and orthopaedic surgery is less than that offered under similar plans a couple of years ago. We owe it to the Office of the Financial Services Ombudsman to arm it with the extra support and resources it needs and to put this legislative framework in place. More important, we need to take action to build confidence and trust in the products being sold by health insurers and by the financial services sector.

This issue was highlighted yesterday on the Joe Duffy programme on Radio 1. The report to which I refer was broadcast after the news, at approximately 2 p.m. It was disturbing to hear what a certain institution did to try to avoid making a payout to a woman whose husband had died a short time previously. When it eventually confessed that it had acted unacceptably, it apologised and tried to address the problem. Even in acknowledging that it was wrong, it enacted a break clause and deducted approximately €25,000 from the mortgage protection payout. After much toing and froing - the lending institution in question had to be hassled - it eventually accepted that it was wrong to enact a break clause with regard to mortgage protection.

These problems are arising on a continual basis. The sums in question are not massive by comparison with the billions of euro we discuss in the context of promissory notes, Anglo Irish Bank or the recapitalisation of the pillar banks that have been mentioned by the Minister on many occasions. However, it is critically important for the Minister to drill down through the services, products and insurance companies in this area. If products that are being sold are not up to standard or if individuals or institutions do not meet the standards we expect - they may have sold packages under false pretences, for example - the Financial Services Ombudsman should have the facility and the ability to publish material highlighting that.

I welcome the Central Bank and Financial Services Authority of Ireland (Amendment) Bill 2011 for all the reasons I have mentioned. I hope it can move on from Second Stage swiftly. I have been around this place for a long time. We often debate Bills in the House during Private Members' time or during the Friday sittings that are available every now and again. Very little happens to them after that, however. They are parked up and the Government uses its majority to make sure they never see the light of day on Committee Stage. In this case, legislation was requested by the Financial Services Ombudsman, rather than by Deputy Michael McGrath, following broad consultation with the industry and with consumer groups. If the Financial Services Ombudsman were given additional powers, such as the ability to publish details of wrongdoing and highlight deficiencies in products, services or institutions, that would help to restore confidence. If this Private Members' Bill is passed unopposed on Second Stage, I hope it can move to Committee Stage for a broad discussion in the not too distant future.

I concur with what has been said about the efforts of the previous Financial Services Ombudsman to define a role for the Office of the Financial Services Ombudsman and make sure customers are comfortable in making complaints. We should not be under any illusions - we know that the banks and financial institutions can use bully-boy tactics. They are bullying the Government by pretending they are actually lending. Like the Minister and everybody else in this House, I know the banks are not lending to the extent they should be. The Credit Review Office that was established some years ago has highlighted that frequently. It is not satisfied with how the banks are treating loan applications. If that is the case, it is clear that the banks are equally likely to be treating individual customers who may be vulnerable in a way that allows for potential wrongdoing. We need to ensure there is confidence at the bottom rung of banking. We need to ensure these matters are dealt with. The Central Bank is charged with dealing with wrongdoing at the upper echelons. As Deputy Mathews knows, it was not dealt with very effectively for many years. I believe we should move swiftly in this key area.

I have already spoken about demographics. As my party's spokesman on health, an issue regarding insurance, particularly for older people, has been brought to my attention. Some insurance companies are downgrading cover plans because they are under stress and pressure, partly as a result of policies bring pursued by the Minister, Deputy Reilly. I refer, for example, to the increase in the fee charged to insurance companies for public beds for private treatments. Some people have found they are not covered for things they genuinely believed to be traditionally covered under the various plans sold by insurance companies. For all those reasons, I urge the Minister to move swiftly and accept the Bill. It is not only being brought forward by Deputy Michael McGrath but has been requested by the Financial Services Ombudsman after much consultation with the industry itself. I hope we can move swiftly.

While we have the Health Insurance Authority, we need this legislation to ensure all aspects of financial services products and insurance are linked together under one office. If a person or body is selling products or dealing with customers in a manner that is not honest, forthright, fair and impartial, there will be a means of redress available to the customers, and the latter will be confident that if they make a complaint, it will be dealt with, and that if wrongdoing is demonstrated in any way, it will be addressed and compensation will be paid. The matter would be exposed publicly such that we could have confidence in the office and the institutions it overseas.

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