Written answers

Wednesday, 30 January 2008

Department of Finance

Financial Services Regulation

8:00 pm

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 142: To ask the Tánaiste and Minister for Finance his views on the fact that the number of consumer focused inspections carried out by the Financial Regulator has dropped from 185 in 2004 to 95 in 2006 as outlined by the report of the Comptroller and Auditor General; and if he will make a statement on the matter. [2319/08]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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It is important in comparing the number of consumer focused inspections carried out by the Financial Regulator in the years 2004 to 2006 as reported in the Comptroller and Auditor General's report to take account of a number of special factors which are highly relevant to the comparison. These factors are, in fact, referred to in the C&AG's report.

These include the consideration that over 20 per cent of the 2004 inspections were preliminary visits to mortgage intermediaries carried out as a means of gathering information about the sector and lasting about an hour each. In 2005, 46 comprehensive inspections of mortgage intermediaries were carried out lasting for a minimum of one day.

In addition issues of concern identified during inspection visits carried out in 2004 required follow-up action by inspection teams. This was particularly the case for larger and more complex financial service providers reducing the time available for new inspections.

The Financial Regulator has also highlighted the important point that if the inspection rate is compared to the size of the current account and savings accounts markets, the retail credit institutions that were inspected by the Consumer directorate during 2004 and 2005 represented an estimated 65% of the combined current account and savings markets in Ireland in 2006. Moreover, the Financial Regulator has inspected the top five insurance companies and the top five banks each year meaning that each year between 65-82 per cent of the insurance market was covered while between 67-95 per cent of the banking market was covered.

The Financial Regulator's Strategic Plan 2008-2010 which was submitted to me last September and which was also laid before both Houses of the Oireachtas sets out the Financial Regulator's plans to monitor and enforce compliance with the Consumer Protection Code through themed inspections and mystery shopping exercises in 2008.

Finally, it is important to stress that consumer-focused inspections are only one of the methods employed by the Financial Regulator to ensure that regulated entities are compliant with regulatory requirements.

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