Wednesday, 12 February 2003
Unclaimed Life Assurance Policies Bill 2002: Committee Stage.
I move amendment No. 1:
In page 11, subsection (2)(b), line 31, after "Chapter 2" to insert the following:
"which shall apply even if the proceeds of such unclaimed policies have already been transferred to the Dormant Accounts Fund".
This section refers to the Minister for Community, Rural and Gaeltacht Affairs who will be in charge of the fund when it is established. The threshold mentioned in the Bill is €500. On Committee Stage in the Lower House the Minister seemed to indicate the possibility of reducing the threshold in the future. The amendment seeks to ensure that if the threshold is reduced in the future, all the proceeds which go into the fund between now and then would be subject to the regulation of the Minister.
The Minister for Finance has said this amendment should not be accepted for a number of reasons. In particular, it would place a considerable administrative burden on companies if they had to re-examine each policy to see how much it was then worth to establish whether personal notification was required. There would also be difficulties with unit linked or with-profit policies and the fact that such policies can decrease as well as increase in value. One particular date for the purpose of this legislation needs to be the focus point. The Minister considers this adeqate. Policyholders have been put on notice that their moneys are due to transfer to the dormant fund. The annual public notices and notices in the premises of institutions will keep the public informed of the scheme. I do not propose to accept the amendment.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 12, subsection (3)(d), line 2, after "policies" to insert "provided the regulation does not adversely affect the interest of the policy holder".
Section 7 states the aim is "to reduce the administrative and financial burden of maintaining unclaimed policies". The amendment seeks to avoid a situation where a financial institution or an insurance company could possibly cut corners in an attempt to cut costs when dealing with people who have unclaimed policies.
Section 7(3)(a) and (c) specifically provide that the Minister may make regulations for the purpose of consumer protection and to facilitate policyholders attempting to identify moneys to which they may be entitled. It is clear that the ethos of the provision is primarily to assist the policyholder rather than the insurance undertaking. It does not need this amendment.
It would not do any harm. The purpose of the amendment is specifically to mention the policyholder in the section. The policyholder is not mentioned in the provision as it stands. I accept the Minister of State's response but the inclusion of the words "policy holder" would not have a detrimental effect. I urge him to reconsider.
It is not necessary. The aim is to facilitate policyholders; it is not necessary to mention them.
Amendment, by leave, withdrawn.
Section 7 agreed to.
I move amendment No. 3:
In page 12, subsection (1), lines 5 to 7, to delete all words from and including ", except" in line 5 down to and including "policy," in line7.
Under this section policyholders who may have more than one policy with an insurance company do not have to be notified more than once. If a policy has reached its conclusion and in two or three years another policy was to be unclaimed by the same person, it would be appropriate and not too large a burden on the financial institution if people were contacted according to the number of policies they held.
This amendment is important, even if it might seem obscure on first reading. The Bill provides for a statutory requirement that only one notice be given, irrespective of the number of policies held. As I said on Second Stage, there should be a requirement on assurance companies to provide a notice at least once each year during the five years or until such time as the legislation comes into play – 15 years in some cases.
The Bill does not impose any obligation on assurance companies until such time as the policy is deemed to be unclaimed. It is possible that there will have been no contact between the assurance company and the policyholder or the relatives of the deceased in cases where the policyholder is deceased. There should be such an obligation. The amendment does not seek to provide for this but at least it would provide for the possibility that there might be an obligation.
On Committee Stage in the Lower House, the Minister said insurance companies will have been making efforts to contact policyholders over the previous five years because it is in their interests to do so. I do not understand why this is in their interests or why we should assume they have been making such efforts. As I said on Second Stage, it seems perfectly within the interests of insurance companies to retain funds for as long as possible. The Minister of State said that they will lose the underlying funds while still having to administer the policy. I am not sure what he means by the phrase "they will still have the obligation to administer the policies while the funds are being transferred into the agency fund".
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.
I did not appreciate that this was the case. Perhaps we can tease it out further. Is the Minister of State saying that if, on maturity, €20,000 might be payable, it is the practice of insurance companies that, if the money is not claimed for the five years afterwards, to apply non-contractual interest? What rate of interest would apply and what is the normal practice?
Once the money has been handed over and subsequently claimed, for example, five years later, is it the intention to continue to pay interest for the five years it has been in the fund or will the undertaking insurance company have to pay over that money?
My real difficulty is that the Minister of State spoke of the comprehensive provision for notifying people of the existence of a policy. However, it is not comprehensive; it is specifically on a once and once only basis after five or 15 years. It is not a huge administrative burden to place on insurance companies to require them to write or, in deference to Senator Quinn, communicate once a year after the maturity of a policy to say it has matured and asking if the holder or family member would like to claim it. This is particularly so in the many cases where the policy holder is deceased.
Perhaps the passage of the legislation in 2001 might have jogged people's memories about accounts they held but about which they had forgotten. However, we cannot jog the memories of deceased policyholders and, therefore, we need a more formal and regular notification mechanism than is provided for in the Bill.
I assume this came out of negotiations with the industry. The Minister surrendered too much if he accepted that one notification was sufficient. I urge the Minister of State, between now and Report Stage tomorrow, to consider placing a greater burden on companies to communicate with policyholders.
I agree with Senator McDowell. When one considers that the companies have had the benefit of unclaimed funds for a number of years, it is not an undue burden to expect them to try to make contact with policyholders on more than one occasion. While newspaper advertising is a good idea, there are many different daily newspapers. Some years ago, it may have been enough to place an advertisement in two or three of the main newspapers, but, as Senator Quinn pointed out, many people do not buy newspapers. Therefore, we must make extra efforts to try to contact people. Given that companies have the use of funds for a number of years, they should be under more of an obligation to make regular contact with policyholders.
With respect, there is a certain misunderstanding. The minimum requirement is one notification, but it is in the interest of the companies to keep trying to contact policy holders because they are administering the policy and the cost—
The policy remains as a policy on the company's system so there is a cost factor involved, even though the company cannot reclaim the cost because it must pay over the full amount. Therefore, it is of no benefit to the insurance company.
There is no benefit to insurance companies to retain policies. Companies would be far better off if the holders came forward to claim their policies. For that reason, we have a stipulation that a notification must issue once a year. If one writes to people once a year to tell them they have a dormant account and they take no notice, I do not suppose writing twice a year will make much difference.
I do not see where this cost factor arises. What does administering the policy actually amount to when the policy has matured, they have calculated whatever non-contractual interest they are going to pay and have transferred the money into the fund? It may appear on somebody's computer somewhere but that is surely the end of it. I cannot see how it would be a huge burden on the assurance companies in those circumstances, which would make it in their interests to get shut of a policy early.
Again I agree with Senator McDowell. The Minister said that it would be of benefit to the assurance companies to offload these policies. If that is the case, then surely we need to have more protection for the consumer. If it would be to the benefit of the assurance companies to offload the accounts to the fund which will be established, and if they cut corners and do not try to look up every tree in every part of the country in search of policyholders, then there is a greater need to protect the interests of policyholders. According to what the Minister of State is saying, it would surely make more sense for the assurance companies to do very little and let the money go to the fund rather than make every effort to try to contact people. I believe that is what Senator McDowell is saying, and I support him.
To clarify further the point about the cost to the insurance companies, they may continue to provide some form of insurance cover, and they certainly would have the administrative costs of holding those records and calculations, despite the fact that the policy has been discontinued. The experience has been that people are coming forward as a result of the public advertisements and so on and that it is not necessary to go to the lengths that the Senator suggests. If we impose further costs on the insurance companies, those costs will inevitably be passed on to the consumer.
I will not go on forever about this because it is not a germane or serious issue, but I do not understand how the costs of administering a policy could possibly be that onerous. What insurance do these companies continue to provide for a policy that has been discontinued, to use the Minister of State's words? Do they, out of the goodness of their hearts, decide to continue some insurance—
There may be life cover because I think that is principally what is intended here. The life assurance policy in most cases will mature when the individual dies. Where does the continuance of insurance come into play if the individual is dead? The individual is dead, the relative does not claim for five years, so what possible additional costs can there be to the assurance company? What insurance can it possibly continue to provide if the maturing element is complete and the individual is dead?
They may still continue to have to hold records and hold the policy. They are obliged to continue to hold a policy even though it is dormant, and there are costs associated with that.
As Senator Quinn pointed out this morning, the clear assumption seems to be that the notice will be sent out purely by ordinary post. Is it possible to develop the Bill in some way to allow for notice to be given in a variety of ways, whether by fax, e-mail or whatever, provided of course that there is an acknowledgement or clarity of receipt? I know that the definition section describes communication as including electronic communication.
I move amendment No. 4:
In page 12, subsection (1), line 36, to delete "€500" and substitute "€250".
I mentioned, when discussing amendment No. 1, that the figure of €500 is used in the Bill. This amendment is designed to question how or why that figure was arrived at. My understanding is that, in similar legislation dealing with dormant bank accounts, a figure of €100 or thereabouts was used. I ask the Minister to explain how and why the €500 figure was arrived at.
The Minister for Finance has informed the Dáil that most low value policies are not yet computerised, so that if insurance companies had to personally notify these customers, it would entail a lengthy and substantive trawl of paper records. Considering the value of such policies, this does not seem worthwhile at this time. A balance must be reached between the aim of reuniting people with their money and not placing an undue administrative burden on the institutions, especially as the costs involved will only be passed on to the consumer.
The full burden of keeping track of a policy should not lie solely with the institutions, and the individual must also take responsibility. The Department has been negotiating this Bill for some time and the industry has already begun preparing for its onset. Since publication of the Bill, the companies concerned have already been attempting to identify policies valued at or above €500. To lower the threshold below €500 would, I understand, cause significant problems for the industry.
There is nothing to prevent the companies from writing to all their policyholders or doing so more than once, which is likely to happen in any case. This year alone, there will be no less than four public advertisements placed regarding this scheme, two by the insurance industry, one on behalf of the banks and building societies and one on behalf of An Post. This should bring the scheme well within the public mindset.
The Minister has indicated that once the records relating to low value policies are fully computerised and the backlog of unclaimed policies has been cleared, it might then be appropriate to consider lowering or removing the threshold for personal notifications. This is a matter primarily for the Minister for Community, Rural and Gaeltacht Affairs.
I welcome the Minister of State, Deputy Gallagher, to the House. I am somewhat satisfied with part of what he has said. He noted that the Minister envisages the possibility of lowering the threshold in the future.
We come back to the financial institutions that will be affected by this. I would imagine that many accounts, particularly older ones, would fall under the €500 threshold, and it is not unreasonable that a threshold should have been used similar to the one that was used for the dormant bank accounts legislation, which was, I believe, around €100. It would have been more appropriate to set a threshold like that.
We are revisiting the argument that the financial institutions will be inconvenienced and will have to go to some expense to follow up on all these smaller accounts that are not yet computerised. However, these companies have had the benefit of this money that has lain dormant for however long, and it would not be too much to expect that the threshold would be considerably lower because €500 is a not inconsiderable amount of money. A lower threshold would be more appropriate.
I have no doubt the insurance industry was less than delighted with the Bill and I am sure departmental officials had interesting negotiations with it and that this is the compromise they reached. The underlying principle is very simple – companies are holding money that does not belong to them and whatever the amount might be, it should be transferred to the fund and available to be claimed in future. I would have thought that this principle holds as much for €10 as it does for €10,000 and €100,000.
The Minister of State's response about computerisation is difficult to buy. While I can well believe older policies are not computerised, I cannot imagine insurance or assurance companies computerise accounts purely on the basis of value. I imagine they computerise an account when someone takes out a policy. I do not think the Minister of State made up this excuse but it seems fairly lame.
What the Senators have said seems very reasonable. To give an example, one company has approximately 500,000 policies below €500 in value which have not yet been computerised.
I am only giving an example. To personally notify the account holders would involve a manual trawl of paper records. This would be a huge undertaking and we might never see the money from the accounts and the people concerned might never be notified. One would have thought that all accounts would have been computerised but that is not the case.
It might be possible to look at this in the future when it would be a matter for the Minister for Community, Rural and Gaeltacht Affairs. While I know this is no assurance, I will bring this matter to the attention of the Minister and inform him of the Senators' views. It is not possible to accept the amendment as of now.
I thank the Minister of State for his very informative response. It is horrific that one company could hold 500,000 policies with values of less than €500. Taken to its extreme, the company could hold up to €250 million that does not come within the scope of this Bill. It is hardly surprising that many of the unclaimed policies are small as they are the ones most likely to be forgotten about. If companies take money from people, they surely have a minimum obligation. The minimum obligation under the Bill is to pay the money but if it is not claimed, it should be transferred to the NTMA.
The Minister of State has given a flavour of the potential value of small policies and more strength to the argument of those proposing the amendment.
I agree with Senator McDowell. The Minister of State mentioned a company which holds 500,000 small policies, a staggering amount. The purpose of asking questions is to ensure the money goes back to its rightful owners. While I accept that the Minister of State will speak to the Minister concerned, we require something more concrete.
The Minister of State has revealed a fascinating piece of information – I had no idea we were talking about this amount of money. We do not know how much money is involved but 500,000 policies of less than €500 in value gives us some idea of the challenge facing us. I accept the Minister of State's view on the prohibitive costs of writing to 500,000 people about what could be €20 or €50 policies. Nonetheless, we must look at this matter again. I would be pleased to know it is not closed and that no company is sitting on a large amount of money that is outside the scope of the Bill. This must be considered again. Perhaps the solution is to reduce the €500 limit to €250 as suggested by Senator Phelan's amendment.
Some of us are old enough to remember the insurance agents who called bringing only paper files. When insurance agents call to a customer now, they bring a laptop and everything is computerised from the outset. It is somewhat surprising to learn that one company has 500,000 small policies but it does not follow that there is €500 in each of those; some of them could be so low as to not be worth dealing with. I do not know what average we should take.
The difficulty lies with old policies where the details are only available in paper records. While it is a matter for the companies, I hope they will computerise all the policies they hold as this would make it much easier to contact policyholders.
While I do not want to give an assurance, I will speak to the Minister for Community, Rural and Gaeltacht Affairs about revisiting this mattere in the future. It is a question of striking a balance between the company and the customer. While my verbal assurance will not be written into the Bill, I tell the House in all sincerity that I will speak to the Minister about this. We have established the principle and perhaps should prevail on companies to computerise all their accounts. While the points the Senators have made are very sensible, I would appreciate if we could deal with the matter now and perhaps revisit it in the future.
If the Minister of State has the information available to him, perhaps he will let us know how many extant policies there are? I assume he does not have information for each company but can he tell us how many policies above €500 in value the company mentioned has? This might give us some sense of where we are drawing the line.
I had information for only one company. Companies do not have this information because they will not deal with it until legislation is passed. It could be some time before we become aware of it. If one company has 500,000 policies, it is likely there are millions.
These companies are trying to have it every which way, which is hardly surprising because that is their business. They tell us that they can guestimate the number of policies with proceeds of under €500, to which this does not apply, but they will not have an estimate of the number of other policies with higher proceeds until such time as the Act comes into play. What they are really saying is that it is too much trouble. It may cause a little bit of trouble for them. Perhaps it is a little like Ryanair in that they are used to pocketing money for a service they did not provide or maybe it is factored into their profits on the assumption that nobody would collect this money. I assume that is part of the argument in this regard. We are here to represent the consumers and it for us to push them into an administrative effort, even it costs them a few euro.
Question put: "That the figure proposed to be deleted stand."
This is a simple amendment to the reference in the Bill to the publication of notice which states "shall publish or cause to have published a notice in 2 or more daily newspapers circulating in the State and in Iris Oifigiúil". My amendment adds the words "also by electronic means". I could almost stop at this stage because I am so sure the amendment will be accepted.
This is great because the Minister of State is trying to create public awareness of the scheme. It is important because the State is not an impartial observer in that it stands to benefit if those to whom this money is due are not found. Therefore, it is not just a question of placing notices in two newspapers to inform people and see if someone turns up. We must go out of our way to encourage people to look.
The Minister of State, Deputy Gallagher, in responding to the previous amendment, spoke of the old days when insurance salesmen visited houses armed with sheaves of paper on which they wrote people's details. As a result, up to 500,000 policies are still on paper. He contrasted that with the modern salesman who comes equipped with a laptop and a modern way of doing things. Despite this, we still insist on this old fashioned way of informing members of the public of the issue of unclaimed policies by placing notices in Iris Oifigiúil and two newspapers. This presumes everyone either buys or reads these publications. There are many newspapers in circulation in Ireland, some of which are not Irish. Some people who read tabloids would never be likely to come across the notices if they were placed in the publications mentioned.
There is, however, a simple, easy and cost-effective way of communicating this information, namely, on the websites of insurance companies. We must ensure this notice regarding unclaimed policies is included on the website of each insurance company. All such undertakings have websites which contain many details, such as address and telephone number, and which should include the notice in question. Using electronic means of communication is an essential part of modern living. I do not know if the wording used in the amendment is correct, but I believe it to be.
As I said this morning, it is almost like somebody in the 16th century proposing the employment of the town crier to go around and tell people, because they did not really believe the printing press would work. If the State existed in the 1890s this kind of legislation would have proposed publicising in two newspapers circulating in the State. We are not in the 1900s but in 2003 and we are using the same sort of words.
I urge the Minister to take into account that when trying to seek out claimants we should make sure information is readily available. Someone living a long way from Dublin who needs to be contacted can simply look at the website to see this information. The alternative is they have to write if they hope to be contacted some way or another. Using Iris Oifigiúil or two newspapers circulating in the State is like something that would have happened 100 years ago. Let us assume there is no cost to this. Every insurance undertaking has a website and it would be a simple matter to include this information there. I urge the Minister to accept the amendment.
I concur with Senator Quinn. In my short time here he has been very consistent on the issue of communication via the most up-to-date technology. He has outlined the case very well. As the facilities are now available and more people are computer literate in the technological age, his amendment is entirely appropriate. I ask the Minister to accept it.
I hope the Minister will accept this amendment. The most important thing Senator Quinn said was that the State will benefit if people do not see they are on one of these lists. We have to make absolutely sure it is available on the Internet because that is the means by which so many people seek information now. The Minister of State, Deputy Gallagher, really made the case for Senator Quinn when he said that nowadays people are using a computer when they think about life assurance policies.
I can remember people such as he described before. Many people tried to get a widow in the village where I lived to take out life assurance so that she had some sort of income. I do not know what happened to her filing system when she died. Now we have to make sure everything is published in a way that can be looked up by most modern people. Some of these will be insurance policies taken out years ago and much younger people will be looking them up, either for relatives or for friends who perhaps do not have access to the Internet.
I receive a huge amount of interesting stuff in my pigeonhole by virtue of the coincidence of names with the Minister for Justice, Equality and Law Reform. I endorse the amendment; it makes common sense. It has one very obvious advantage. A notice in a newspaper appears on one day and is gone, whereas a notice posted on a website is there constantly and is obviously more accessible to people who have the use of PCs.
The Minister for Finance is convinced, as I am, that the best way to bring the scheme to the attention of the public at large is through the mechanisms provided in the Bill. Again I reiterate the notices will be in the national daily newspapers and they will also be prominently displayed in all public offices of banks, building societies, An Post, life assurance companies, etc.
I accept the Senator's point about the use of electronic communications in the age in which we live, but we must remember we are talking about a slightly different era than our modern communications era. These are policies that have lain unclaimed for at least five years and in most cases substantially longer. These policies would have been taken out some considerable time before that. It would be reasonable to assume the contact details given to the life assurance companies did not include e-mail or website addresses. A vast number of these policies date back to the turn of the century.
—or any other form of electronic communication. It would not be possible, even if desirable, for the life assurance companies to notify customers in this way. The Bill merely tries to set down the minimum requirements in terms of notifying customers. In any case the important point made by the Minister for Finance is that the sole responsibility for keeping track of records does not and should not lie with the institutions. It is for the individuals themselves to look after their own property. Nevertheless, as has been stated on numerous occasions, it is in the interest of the companies to make every effort to contact policyholders by whatever means, as they will lose the underlying funds if they fail the task.
As mentioned on Second Stage, information is available on various Government and bank websites including that of the Irish Bankers' Federation and it will soon be on the website of the Irish Insurance Federation. The maximum use is being made of electronic media and, as I assured the Senator this morning, the Minister is considering the use of electronic media in terms of future developments. Despite Senator Quinn's charm and powers of persuasion, I do not intend to accept his amendment.
I thank the Minister for his kind words. I have tabled similar amendments on a number of occasions and they were generally accepted because it had been omitted in the first place.
I think the Minister may be mistaking section 8 for section 9. Section 8 deals with the notification of the customers – the Minister referred to e-mail. Clearly I did not table an amendment to that section because I recognise exactly the point he has just made. I also did not table an amendment to section 12, which deals with a register. I originally thought of doing so, as I thought a register should be available, but I realised there were issues of confidentiality and privacy.
This section is totally different and I disagree with the Minister for Finance. The Minister of State has just said that the Minister for Finance is of the opinion that the best way to contact them is to omit putting the information on the website. That is impossible. That is not the best way. The Bill proposes prominently displaying this in places like post offices and banks. However, here is a simple cost effective way that is available to everybody who has a computer.
The Minister made a real error when he talked about a slightly different era when people took these policies out 100, 80 or 50 years ago. However, the amendment does not suggest notifying them, but rather telling them that this exists. The section deals with publication of notice and states:
Where an unclaimed policy is held at an insurance undertaking . the insurance undertaking shall publish or cause to have published a notice in two or more daily newspapers circulating in the State and in Iris Oifigiúil.
This is an effort to tell people this scheme exists.
We are not talking about insurance companies being impartial in this. I accept the Minister's point that insurance companies will be happy if people find the notice as otherwise the State receives the money in the accounts. I am talking about the State not being impartial. As the State stands to receive the money, it is in its interest that as few people as possible are informed. I find it difficult to accept the Minister of State's refusal to accept the rational case for this amendment. I am concerned that he is not listening and I urge him to reconsider.
I support Senator Quinn. His case is transparently a good one. My understanding of the wording of the amendment is that the Senator is not suggesting we substitute the requirement to place the notice in the newspapers, but that we supplement it. One could specify that the provision would only apply in the event that insurance companies have websites. Clearly, however, they already do.
The Minister for Finance has no grounds for seriously objecting to obliging insurance companies which maintain websites to make available this information. I am aware of his propensity not to accept amendments, but even he, I suspect, would be willing to accept this one. I urge the Minister of State to discuss the matter with the Minister overnight.
If I thought the Minister was prepared to accept Senator McDowell's suggestion to debate the matter with the Minister overnight, I would consider withdrawing the amendment. I want to know if he intends to maintain his position that the section, as framed, is a fait accompli. The proposal is so rational and sensible that I have difficulty comprehending his insistence on rejecting it. I am sure he is under instruction from the Minister for Finance not to accept any amendments.
It seems likely that failure to include publication on a website, in addition to two newspapers and Iris Oifigiúil, was an oversight. I am sure if the Minister of State asked the Minister to consider this sensible proposal, we would find it accepted on Report Stage.
I have not been commanded by the Minister for Finance not to accept amendments. That is not his style. If electronic media would improve communication with the audience the Senator is trying to reach, there would be a case for reconsidering the matter. This is not, however, the case. The audience in question is more likely to receive the communication through the mechanisms laid down in the Bill. A considerable effort is already being made to use electronic media through, for example, the various Departments, including the websites of the Departments of Finance and Social and Family Affairs and the new Department for Community, Rural and Gaeltacht Affairs, the Irish Banking Federation, the various banks and the Irish Insurance Federation which is about to come on-line. The information will be available through a range of websites.
Consequently, the Senator's demand is not necessary. We also have to strike a balance between the total cost of notifications and the way in which we reach the group of people in question.
The people who are not receiving the communication under the current regime of notification would certainly not receive it as a result of the proposal put forward by Senator Quinn.
We have arrived at the real issue, namely, the contention that the audience in question is not computer literate and consists of old people, like myself, who will not look at the website. Has the Minister of State considered what happened in the context of the overseas accounts, bogus or otherwise?
How often have we read in the newspaper about children, grandchildren or nieces and nephews trying to attend to these matters on behalf of people who are not in a position to do so themselves? Some members of the target audience will have difficulty remembering the company with which they hold policies. It is these people who will ask younger relatives to find out on their behalf. While we can rule out the possibility that they will look up Iris Oifigiúil , at least they will be able to persuade others to use the Internet to try to find the information they require. The nature of the audience is the reason we need to have the information notified on websites.
The Senator makes a fair point in that it is possible that the children or grandchildren of people overseas, for example in the United States, may wish to find further information. The natural place to seek such information would be a departmental website or a bank or insurance website. I am informed by my officials that a significant number of inquiries about this scheme and the dormant accounts scheme have already been made on the various websites of the Department of Finance and those of other Departments. From a practical point of view, the proposal would have no advantages.
I promise I will conclude soon. I disagree with almost everything the Minister of State has said. We are passing legislation for the future, not just a few years. I hope most legislation passed by the Houses will endure for decades and there will be no need to return to it. As I stated, the Minister of State's position is akin to someone in the 16th century expressing doubt that the printing press would catch on.
On the issue of cost, the proposal does not entail a cost as every insurance company already has a website. The amendment could be changed and the condition added that notification must be included, provided the company in question has a website. The Internet is the cheapest form of public information.
I have another concern. Since I started tabling amendments such as this one a few years ago, I have identified some Departments which are very au fait with modern communications and others which lag behind and do not appear to realise the need for change. The Department of Finance and several others have been good at using these communications.
The target audience does not necessarily consist of people who took out an insurance policy 20, 30 or 50 years ago. It is much more likely that they will be the sons or daughters of such people who have been asked to seek information about the scheme. The people concerned will not become aware of the scheme unless they happen to buy the newspaper in which notification is published on the day of publication. For example, people living in the Cork area, who tend to read the Irish Examiner, will never become aware of the scheme unless the notice appears in that newspaper.
I am disappointed by the Minister of State's response. If he indicated a willingness to think over the matter overnight and introduce an amendment on Report Stage, I would considered withdrawing my amendment.
I want the website to feature exactly what is described in the amendment, namely, that where an unclaimed policy is held at an insurance undertaking, the undertaking in question "shall publish or cause to have published a notice in 2 or more daily newspapers circulating in the State and in Iris Oifigiúil". I want to ensure that the notice to be published at certain intervals is also published by electronic means, in other words, on the website of the undertaking in question. I cannot believe the Minister of State will not accept the amendment.
While the Minister of State consults his official, let me make a slightly different argument. Am I correct in saying that, in respect of the section to which we have just agreed, section 7, it would be open to the Minister in any event to effectively vary, by regulation, the way in which the news can be given? Effectively, he or she could amend the legislation and provide for the amendment being argued for by Senator Quinn. We do not yet know what the information will be because the information contained in the notice is to be in what the Bill calls the prescribed form, which we do not have because that is a matter for regulations but I assume they will set out the procedure that somebody has to follow in order to claim the money due to him or her.
It does not state that. Obviously, we can guess what would be involved because I presume it will entail the procedure somebody would have to follow but it states the notice shall be in the prescribed form or in a form which should contain certain information, etc. I assume Senator Quinn is saying there should be a notice on the website similar to what would appear in the newspapers.
There is a misunderstanding. The notice, in whatever form, will appear in two newspapers. I am saying it should also appear on the website of the individual insurance undertakings. Every insurance undertaking has a website. It would cost nothing to add this information. We do not know what it is but a few extra lines could appear on the website at no extra cost, and it would be the same as that in the local newspapers. It would be a better way of communicating. It is in the State's interest to avoid claims because it will have more money to give to worthy causes. That is the reason I want to encourage the State to ensure—
Yes. I referred to Irish Insurance Federation websites. It has been clarified that the insurance companies are happy to put the information on their websites. The Department's website is already receiving questions on the matter. In respect of the prescribed information, that will be general information about the insurance companies involved, who to contact and general details about the scheme. In addition, there is a question and answer section on the Department of Finance website which will give a fuller understanding of the scheme, where people can go, what they should do and so on. The issue is being adequately dealt with. The only point that might be made is that much more information could be put on a website. That is what I though the Senator wanted but, as I said this morning, that would pose its own difficulties.
I will conclude with this point. Why are we going to the trouble of passing legislation which states this information must be placed in two newspapers circulating in the State? The reason we are doing so is to inform people of the scheme. We are simply saying the information should also be included in the website of each of the undertakings. I cannot believe the Department of Finance wants to include the information only in two newspapers and Iris Oifigiúil in the belief that that will solve the problem.
I move amendment No. 5:
In page 13, subsection 3(b), line 11, after "policies" to insert "and the number of such policies".
The Minister of State, Deputy Gallagher, stated earlier that one of the financial institutions holds 500,000 policies under the value of €500. In light of that startling figure it would be appropriate that any advertisement published would contain the number of unclaimed life assurance policies. If a figure of the magnitude of 500,000 policies for one company is mentioned – this adds up to a vast number when one considers all the companies involved – many people would investigate the possibility of an outstanding policy. It is for that reason that I propose the amendment.
It would probably not be possible for the undertakings to publish on the day of the public notice the number of unclaimed policies they hold. Section 9(1) does not require the companies to have identified all unclaimed policies by that date. Each company will merely have to establish by that date, usually the first weekday in October in each year, that it holds at least one such policy. If any such policy meets the criteria of section 9(1), where a policy is below €500 and is deemed non-correspondent, and the undertaking has previously tried unsuccessfully to make contact with the policyholder, then the undertaking must place a public notice in relation to those policies. In each case there seems to be little value in publishing the detailed information. It is enough that the public be made aware that all or most of the life assurance undertakings hold unclaimed policies. For those reasons I do not propose to accept the amendment.
There is some merit in the amendment, although we need not require insurance companies to have precise numbers. If a notice appeared stating there are 500,000 unclaimed policies, rather than just a formal statutory notice, ancillary publicity from radio or television would result. While I accept that there will not be a precise number by October this year, the undertakings will have a clear idea by next year. In three or four years they should be in a position to give us that information earlier. A general broad indication would attract more interest.
That is the reason for the amendment. We often do not pay too much attention to newspaper advertisements, but including an estimate would cause people to take more interest. They would then find out if they had an unclaimed policy themselves.
The problem is that companies may not be in a position to be accurate about the number of unclaimed policies they hold on the date in question. If they gave out the wrong number of policies it would create serious difficulties. If, at a later stage, companies want to indicate the numbers of policies they have that is fine. However, inserting a provision into the Bill that they must state the exact number they have on the first weekday in October each year would be impossible.
(i) a Central Database of the name and date of birth of unclaimed policies is jointly operated by the NTMA and institutions covered by this Act so that a member of the public can check the possibility that they are the holder of an unclaimed policy or have an entitlement to its proceeds, by furnishing photographic evidence of identity and the Birth Certificate of the possible policy holder, and
(ii) the operator of the Central Database, on receipt of this evidence, will arrange for any institution holding an unclaimed policy in that name to make contact with persons in respect of whom there is prima facie evidence that they are entitled to the proceeds of an unclaimed policy, in order to establish if he or she is entitled to any monies;".
Amendment No. 6 and some of the subsequent amendments seek to establish a central database of names and dates of birth that would be managed by the NTMA, in conjunction with the financial institutions, to provide a list so that people can determine more easily if they are holders of unclaimed policies or are the next of kin of deceased holders of such policies.
On Committee Stage in the Dáil, questions were asked about the privacy implications of the idea but a central database operated in a restricted manner by the NTMA would not affect people's privacy. It would make it easier for people to establish if they are policyholders. That will be the major problem with this legislation and if the Minister of State took some of these amendments on board, it should resolve it.
These are the most important amendments that we have discussed so far. The Minister indicated willingness to consider the idea when he dealt with the matter in the Dáil. Simplicity is the aim behind them. If someone wants to claim a policy, there should be one point of contact – one phone number or website – where they can get information. At present, that does not apply.
The Minister of State, Deputy Gallagher, painted an interesting picture of huge numbers of papers gathering dust for decades and did not give the impression that they were collated in an accessible and user-friendly fashion. It would be desirable that the obligation would rest with the NTMA and the companies and that there would be a central database where people could get the information they require. At present, a person would have to contact each insurance company. Some of those companies might not be based in Ireland and only deal through branches here. Some of them, such as the one mentioned earlier, may not be as active in Ireland now as they were 20 or 30 years ago and perhaps their customer service is not as good as it was then.
It is in everybody's interest – and certainly in the interest of the consumers – that a central database be maintained. I assume the Minister of State is about to say we should not be providing for this in the Bill and I appreciate that it would take some time to put in place. However, I believe he and his colleague, the Minister for Finance, should take the opportunity to send a clear message to the insurance industry and, indeed, to the NTMA because, once the State has the money, there is some responsibility on us to account for where it came from. We should send a message that we expect such a database to be put in place within a few years.
The Minister for Finance has already stated that if such a database was properly constructed and managed, this might further assist members of the public in tracing dormant moneys. However, there are, as I said earlier, legal complexities and obstacles to be surmounted in order to proceed with the proposal and, accordingly, it is not a matter that can be countenanced in the current Bill. There is the matter of a constitutional right to privacy, which is enjoyed by all. Nevertheless, there is merit in the proposal and the Minister for Finance has asked his officials to examine the matter further and to discuss the pros and cons of the proposal with the industry and the Office of the Attorney General. As the Minister sees it, centralising large volumes of personal data would not only have to be legally permissible but also cost effective and user friendly to warrant pursuing the exercise.
The House can be assured that the matter is still under consideration as a near term objective and may well be brought into being within a few years, as the Senator has suggested. For the moment, however, it would not be practical to include it in the current Bill. Accordingly, I cannot accept the amendment now.
I am somewhat reassured by the Minister of State's statement that the Minister for Finance is considering the matter. However, there is still rather loose terminology as to what consideration is really being given. In terms of cost effectiveness, to which the Minister of State referred in his reply, I believe it would be quite cost effective and very easily accessible to people. That has to be the main objective and failure to achieve it is the main problem which could befall this Bill. We have to try to ensure that people can easily get access to information as to whether they are holders of relevant policies. The centralisation of detailed information should be looked at. I accept that it may be difficult to include that in this Bill but I would like a more definite assurance that serious thought is being given to it by the Department of Finance. It would be a worthwhile mechanism for people to establish whether they have policies to which this Bill relates.
I accept that, in practical terms, this would take a little time to put in place but I believe the officials are over emphasising the issue of legal and constitutional difficulties. I do not see a need for substantial change in the way one currently claims under a policy – I assume that is by filling in a form and providing certain information, including a policy number. Obviously, a claimant should be required to provide certain basic information and, based on that, the central database would be used to establish whether there was a policy to which he or she might be entitled. What would take time, obviously, is putting the database together.
Subject to correction by the Minister of State, I understand there is no requirement under the Bill for insurance companies to give the NTMA details of the individual policyholders or the people they think might be entitled to the money. They are simply required to give the totals to the NTMA, retaining the details on the register within the insurance companies.
I suggest the way to start is that, when money is handed over to the fund, the NTMA should also be given details of the policy owners so that, over time, it would build up a database of, at least, the owners of the policies from which funds have been transferred to the agency. Over time – perhaps a relatively short time – one could build up the database and the necessary information to respond to queries.
I believe legal and constitutional difficulties would arise only if people had access to information concerning other people's policies. As matters now stand, if one contacts an insurance company one does not have access to the total number of policyholders they might have; one will only be told whether one has an interest in a policy. I do not see that that would necessarily have to change. I accept there would be a problem in giving access to a register but all we require is that one agency has enough information available to it to respond to queries from members of the public.
The Department is taking the matter seriously and has referred it to the Attorney General. I assure the Senator that it is being actively looked at by the Department.
I do not quite understand Senator McDowell's point. It is a complex issue and there are other negative aspects in relation to a central database, such as the possibility of fraud and so on. It is a complex issue which has to be looked at carefully. The legal implications are not as simple as the Senator has indicated and that is why it is being considered by the Attorney General and will be further considered by the Minister, perhaps, as the Senator has suggested, with a view to its being introduced after a number of years if it is found that the legal complexities can be overcome.
My difficulty is that I do not understand what the legal complexities are, even in very broad outline. As I see it, if somebody who believes he or she may be entitled to benefit under a policy contacts an agency which has a database of information, that database is not available to them in total but they should be entitled to a simple "Yes" or "No". I do not see where any legal complexity arises.
It already arises under the current procedure for claiming from an insurance company. The possibility of fraud or the difficulty to which the Minister of State alluded could already arise in circumstances where people claim under policies.
A central database could lend itself more easily to fraudulent practices. The main issues to be considered are the insurance companies' duty of confidentiality to their customers, the issue of non-correspondence accounts and policies, the Data Protection Act and, mainly, the constitutional right to privacy.
Amendment, by leave, withdrawn.
Question proposed: "That section 9 stand part of the Bill."
Report Stage of the Unclaimed Life Assurance Policies Bill will take place tomorrow. As it appears there is a need for two or three minutes to complete Committee Stage, with the agreement of the House and yourself, a Chathaoirligh, I propose that we allow for that.
Section 14 agreed to.
I move amendment No. 10:
In page 18, subsection (3)(a), line 22, after "undertaking" to insert "in accord with regulations set by the Minister".
I will be brief because I know you are anxious about the time, a Chathaoirligh. The wording in this subsection is too loose and the object of the amendment is to tighten it up. The subsection states "subject to any charges or deductions that may be made by the insurance undertaking", and the amendment would add the words, "in accord with the regulations set by the Minister". It is just to tighten up the controls on possible corner-cutting by financial institutions which may be concerned with this.
Section 15 of the Bill provides that the moneys to be paid to a valid claimant are to be net of any charges or deductions that may be made by the insurance undertaking, in other words, the charges that comply with the normal legal practice for insurance undertakings in these circumstances. As such, these charges and deductions take account of taxes and administrative charges which the undertaking are legally entitled or, indeed, obliged to recoup from the proceeds of a policy that has been encashed. It would be inappropriate for the Minister for Community, Rural and Gaeltacht Affairs to make regulations in relation to such taxes as they related to revenue matters or the contractual relationship between the insurance undertaking and its client. In any case, the basis for these charges is the policy contract. The Minister for Finance has long held that these schemes should interfere as little as possible with the rights of customers and that is what both the relevant pieces of legislation have tried to adhere to. For that reason I do not propose to accept the Senator's amendment.
I have a question for the Minister of State about something which I genuinely do not understand. The Bill, and this section in particular, gives the power to the Minister for Community, Gaeltacht and Rural Affairs to make what are effectively financial regulations. I understand that he is the Minister responsible for the disbursement of the fund at the other end of the process and that is fair enough, but it seems to me that the making of the regulations governing how the insurance companies deal with these matters is, or properly should be, a matter either for the regulator when established or for the Minister for Finance. I really do not see that the Minister disbursing the fund should make the regulations.
All I simply said was that it would be inappropriate for the Minister for Community, Rural and Gaeltacht Affairs to make regulations in relation to the taxes and administrative charges.
I understand that, but in several sections it also gives the power to the Minister to make regulations in relation to how life assurance policies are dealt with, which is properly a life assurance matter for the independent regulator or for the Minister for Finance. I know it requires the consent of the Minister for Finance but I am quite surprised that the Department of Finance, which is the sponsoring Department, has assented to it. It seems strange that the Minister for Community, Gaeltacht and Rural Affairs should be the primary Minister in terms of making those regulations.
It is only for the actual disbursement of the funds. As I said, he has no involvement in administrative or taxation matters. The Minister for Community, Gaeltacht and Rural Affairs has the policy responsibility for the disbursement of the funds which will be done under his agency.
Although it is not a particularly germane matter, section 7 states:
The Minister for Community, Gaeltacht and Rural Affairs, having regard to the purposes specified in subsection (3), following consultation with the regulatory authority and subject to the consent of the Minister for Finance, may make regulations providing for the application of this Act and instruments made under this Act, with and subject to any modifications that may be specified in the regulations, to policies. that are issued to such class or classes of person .".
It gives a much broader power to the Minister to make regulations about the very application of this Act. For example, according to my reading of it, the Minister for Community, Gaeltacht and Rural Affairs can change the €500 limit in terms of the policy to which it applies. Why is it that particular Minister? It is a policy decision made somewhere in the Department.
As I said, he can make a change in regulations but he must do it in consultation with the Minister for Finance. His primary responsibility is for the disbursement, from a consumer point of view, of the funds.
I move amendment No. 11:
In page 19, subsection (2), between lines 33 and 34, to insert the following new paragraph:
"(f) the making of all reasonable efforts to identify unclaimed policies.".
Section 17(2) states:
Each insurance undertaking shall furnish a certificate of compliance to the regulatory authority, not later than one month after the end of each financial year, in the form and manner that the regulatory authority may specify, stating, if this is the case, that the insurance undertaking has complied with this Act in respect of the following:
It lists three or four areas. This amendment adds an additional item to that list, which is, that they have made every reasonable effort to identify unclaimed policies.
It is a reasonable, if not substantial, amendment which is fundamentally important to the object of the legislation. It is a basic amendment which will not damage the legislation in any way. I would urge the Minister of State to accept it.
On a point of clarification, I proposed that we allow a further two or three minutes. If the debate is to continue, we can leave it until tomorrow and can conclude Committee Stage before Report Stage. I am conscious that we were to conclude at 6 o'clock. I am not rushing anyone. I thought it was a matter of two or three minutes. The Minister for Agriculture and Food is outside. With the agreement of the House, we will resume on that last amendment prior to the Report Stage tomorrow.