Frank Fahey (Galway West, Fianna Fail)

To reassure Senator John Paul Phelan, section 8(1) specifically provides that each holder of an unclaimed policy should be given written notice by the insurance undertaking concerned. This means that if a person has more than one policy, he or she will be given notice for each policy and there will, therefore, be no difficulty.

With regard to annual notification as outlined in section 9, public notifications will take place every year so we can take it that members of the public will have sufficient notice about what is happening to their money. This year alone, there will be four such advertisements. The experience to date shows that the passage of this legislation through the Houses has aroused public interest and the Department has received many queries in respect of it. We cannot emphasise enough that, in the first instance, it is the business of every individual to check if they or their relations have policies that have been left dormant. Irrespective of how comprehensive we make notification, there will always be a case for further notification. Some €150,000 has already been reclaimed, which record speaks for itself.

Senator McDowell made a point about it being unfair that life companies have the use of money from unclaimed policies for a considerable period before notice is made to the policyholders. He gave an example that if €20,000 was due on a person's policy today, but he or she did not claim until after they were notified of its existence – some five or 15 years after it was due – they would have suffered a loss and would only stand to gain the €20,000, even though the life company made good on the interest. That is not the case. Section 2(4)(a) provides that the amount to be transferred to the dormant account from the life companies includes any interest applied by the insurance undertaking on the relevant date to the moneys payable under the policy, in accordance with the usual practice for the undertaking concerned. The relevant date in this instance is the date of transfer to the dormant accounts funds.

The Irish Insurance Federation has advised that all insurance undertakings apply non-contractual interest to the proceeds of any moneys left on deposit with them – in other words, on unclaimed policies. In drafting the Bill, account was taken of this to ensure the policyholder was not prejudiced and to make it clear to the undertakings that this interest must still be applied, even though the moneys will now be lost to them.

There is no gain to the assurance company as the Senator suggests. The point has been accepted by the companies that they have long enjoyed the use of the unclaimed money, but this legislation requires them to transfer all the proceeds of the policy, including the accrued interest, to the dormant fund such that what they have enjoyed can still be claimed back by the policyholder. The policyholder is fully protected.