Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I move amendment No. 1:

In page 3, between lines 14 and 15, to insert the following:“Amendment of section 57BA of Principal Act

2. Section 57BA of the Principal Act (as inserted by section 16 of the Act of 2004) is amended by inserting the following after the definition of “investigation”:

“ ‘long-term financial service’ means a financial service where the actual or intended duration of the service is 5 years and one month, or more, and is not subject to--

(a) an annual renewal, or

(b) a right to unilateral cancellation by either party,

prior to the expiry of the actual or intended duration;”.”.

These amendments to section 3 of Deputy Pearse Doherty's Bill, as amended on Committee Stage, deal with the time limit to make complaints to the Financial Services Ombudsman and the necessary definition of "long-term financial service". As the Minister, Deputy Noonan, stated on Committee Stage, the heads of the Government's Bill, published last September, provide for a possible three-year discoverability period for complaints in respect of long-term services. This is now reflected in section 51 of the Government's Bill, which was published a couple of weeks ago. In that respect, the extension of the time limits as proposed by section 3 of the Deputy's Bill and related amendments are to be welcomed in principle.

The Deputy's amendments Nos. 8 and 9 seek to remedy some of the issues that the Minister highlighted on Committee Stage, such as the inclusion of the standard objective test for the date of knowledge, and discretion is provided to the ombudsman to allow for a longer period where it would be just and equitable, similar to section 51(2)(iii) of the Government's Bill.

However, I still have some difficulties with a number of the Deputy's proposed amendments. The definition of "long-term financial service" as set out in amendment No. 2 is not satisfactory because it could include a wide range of policies or services that are subject to annual renewal or could be cancelled unilaterally by the financial services provider.

In effect, it will change products which are short-term financial service products, such as house insurance and potentially travel insurance, into long-term products on a par with life assurance and pensions. I am especially concerned that the impact of this very wide definition of long-term financial service could increase the cost of policies such as car insurance or home insurance for customers because insurance companies would have to be mindful of the possibility of claims being taken in a longer timeframe, and they would accordingly pass the administrative cost of keeping records for longer periods on to customers. Additionally, they could refuse to cover customers up to a five-year period or increase annual premiums substantially after a five-year period to deter them from becoming long-term customers under Deputy Doherty's definition. This would have a negative impact on customers.

Due to the concerns that the Deputy's definition of long-term financial services in amendment No. 2 could increase the cost of insurance and other annual policies, I will be pressing amendment No. 1 in regard to the definition of "long-term financial service". In amendment No. 1, I have provided a definition of "long-term financial service" as meaning a financial service where the actual or intended duration of the service is five years and one month, or more, and is not subject to annual renewal, or a right to unilateral cancellation by either party. This is intended to include policies like mortgages, long-term loans and so on.

Second, while I agree with the intention behind the Deputy's amendments Nos. 8 and 9, which would bring the time limits more in line with section 51 of the Government's Bill, I am afraid that the technical drafting of the amendments on the new time limits for complaints is not correct, given the current wording of section 57BX of Part VIIB of the Central Bank Act 1942. However, if Deputy Doherty was agreeable, I think the Minister's amendment No. 7 achieves what the Deputy seeks to achieve, which is the extension of the time limits for a possible further period of three years, based on the date of knowledge of the conduct, or when it ought to have been known, and the discretion of the ombudsman to extend the time period for complaints where this is just and equitable. For these reasons, I am pressing my amendments Nos. 1 and 7 in regard to the amendment of section 57BX of the Central Bank Act 1942 to achieve the extension of the time limits that both sides agreed to in principle, with the exception of the details of the definition of "long-term financial service". Therefore, I am opposing the Deputy's amendments Nos. 2, 8 and 9.

In regard to Deputy Doherty's amendments Nos. 10 or 10a, I can see what he is seeking to achieve, which is to put beyond any doubt that the ombudsman can investigate complaints made before the extension to the time limits but which had not been assessed, and to allow complaints that were refused as being outside the then applicable time limits and which have been resubmitted to the ombudsman because they could now possibly qualify under the new extended time limits. However, if the Deputy accepts amendment No. 7 to achieve his desired aims of extending the time limit and if he is pressing his amendment No. 10, then the numbering referred to within amendment No. 10 may need to change, and I see that he has submitted an amendment No. 10a to rectify this. The numbering of my amendment No. 7 will also need to change and I can outline the changes that need to be made to my amendment No. 7 to take account of the acceptance of amendment No. 10 on the Final Stage.

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