Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

This is the biggest change to both this Bill and the Government Bill. It lies in the extension of time to complain about long-term financial services so it is essential that a solid and accurate definition is formulated. Section 5 of this Private Members' Bill, as passed by the Dáil, reflects a similar position in the Government's Bill which extends the time limits for complaints relating to certain long-term financial services to six years from the date of the conduct complained of, or three years from the date the complainant knew or ought reasonably to have known about the conduct. The new time limits for long-term financial services will apply to complaints made to the ombudsman about conduct that occurred during or after 2002. The service which the complaint is about must not have expired or otherwise been terminated more than six years before the date of the complaint.

The Private Members' Bill and the Minister's Bill make a distinction between long-term services and short-term services so that the resources of the ombudsman can be more effectively used to deal with these cases, where the consumer may not be aware of an issue until the long-term service has expired. This approach, as differentiating between long-term and short-term products, was taken as it was considered to be a balance between the concerns of the consumer representatives to give consumers greater protection and those concerns of the industry regarding record keeping and availability of documentation.

Furthermore, and perhaps more important, the extended time limits for long-term financial services required considering and balancing the rights of all parties in a case and ensuring the public interest was served, both in terms of the avoidance of late claims and the timely administration of justice. The existing time limit of six years has been retained for short-term services, where a claim should or could have been made within the six-year period. Six years should be sufficient time in which to make a complaint on issues as the service will most likely be concluded within the timeframe.

The wording of the definition of "long-term financial service" in amendment No. 1 addresses previous concerns related to previous technical drafts and definitions. As Senators may be aware, the Minister for Finance and the then Minister of State, Deputy Eoghan Murphy, were of the view that the definition of long-term financial services, as set out in the Deputy's Bill as passed by the Dáil, was not satisfactory because it included a wide range of policies or services that are subject to annual renewal or policies or services that could be cancelled unilaterally.

The Government's rationale for excluding annual policies from the definition of long-term financial services and its concern to avoid passing extra costs to consumers were well set out during the various Stages of these Bills. In essence, insurance companies would have to be mindful of the possibility of claims being taken in a longer timeframe for those products and they would accordingly pass the extra costs on to consumers. They could refuse to cover customers after a five-year period or increase annual premiums substantially after a five-year period, to deter them from becoming long-term customers under the current definition in the Private Member’s Bill. This would have a negative impact on customers.

The revised wording clarifies, for the avoidance of doubt, that a range of policies or services which are short-term financial services, such car insurance, travel insurance, etc., are not included in the definition of "long-term". Therefore, I am pleased that this amendment No. 1, as put down by the Senators on section 2 of the Bill, is identical to my amendment No. 1 and it can be agreed to.