Richard Bruton (Dublin North Central, Fine Gael)
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Question 163: To ask the Minister for Finance the requirements under dormant accounts legislation on life companies to contact the policyholders in respect of single premium investment bonds which have a distant maturity date; and if his attention has been drawn to the complaints that the standard format of communication would encourage many individuals to encash their policies; and if he will make a statement on the appropriateness of the procedures coming into operation ahead of the maturity date of the policy. [5884/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Under section 6 of the Unclaimed Life Assurance Polices Act 2003, a life assurance policy is treated as unclaimed if, in the case of a fixed term policy, the specified term has expired, if an amount would be payable if the policyholder were to make a claim, and if the insurance undertaking has received no communication from the policyholder for a period of at least five years. In the case of a policy which does not have a specified term, these conditions are met only when a period of 15 years has elapsed without any communication from the policyholder.

Section 8 of the Act sets out the procedures for notification of the holders of unclaimed policies before a transfer is made to the dormant accounts fund. The insurance undertaking must give written notice to the policyholder, at the last address known to the undertaking, of the following: the name and current address of the undertaking and any information regarding a change of name since the policy issued; that an unclaimed policy to which the policyholder appears to be entitled is held at the undertaking; that if no communication from the policyholder is received by the undertaking, the net encashment value of the policy will be transferred to the dormant accounts fund; and that the policyholder is entitled to claim the moneys payable under the policy.

Where the value of the policy is €500 or less or the undertaking has been either instructed not to contact the policyholder or is unable to do so, section 9 of the Act requires the undertaking to advertise the fact that it holds unclaimed policies. In the normal course of business, insurance undertakings may contact policyholders whose policies have not yet matured for a variety of reasons unconnected with the unclaimed policies legislation. These include the requirements under the Insurance Act 1989 and the Life Assurance (Provision of Information) Regulations 2001 referred to in to my reply to the Deputy's question of 10 February last.

I understand that it is also common industry practice to send out annual communication to clients, including such information as unit allocation statements, indexation notices and annual benefit statements. Where a policy has a fixed term, such as in the case of single premium investment bonds, the undertaking will normally write out to the policyholder in advance of the maturity date to advise them that the policy is about to mature. These commercial practices may vary from firm to firm and may not extend to all types of policy.

I am informed by the financial regulator that it is not aware of any complaints regarding life companies' correspondence in respect of unclaimed policies, including single premium investment bonds. However, any complaints should in the first instance be made to the regulator at: Consumer Information Department, Irish Financial Services Regulatory Authority, PO Box 9138, College Green, Dublin 2, lo-call 1890 77 77 77.