Willie Penrose (Longford-Westmeath, Labour)
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Question 107: To ask the Tánaiste and Minister for Finance if his attention has been drawn to a newspaper advertisement (details supplied); the circumstances in which there might be a legitimate market in the purchase of second-hand life assurance policies; his function in enforcing the laws governing life assurance policies and the sale of assurance policies to persons who have no insurable interest in the life assured; if the advertisement in question will be the subject of investigation by his Department; and if he will make a statement on the matter. [14302/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I understand that the issue the Deputy is referring to relates to what is known as the secondary market for life insurance policies. I have been informed by the Financial Regulator that this market is minimal in Ireland, by comparison with the US and the UK, for example. The type of policy that is most likely to be sold on is a life assurance investment policy. This type of policy is intended to be held to maturity in order to maximise the value of the policy. However, some policyholders may, for a variety of reasons, wish to realise some level of value from their policies before maturity. In these cases, the policyholder may choose to sell the life policy, as the value might be greater than the surrender value at that time. As part of the sale process, the policy is typically assigned to the purchaser and the purchaser becomes the beneficiary. The purchaser can continue to pay any remaining premiums on the policy and hold the policy until maturity or earlier death of the policyholder and obtain the full value of the policy. The purchaser could also sell-on the policy at a profit.

The Financial Regulator has indicated that it does not consider the sale and advertisement of such policies to be inappropriate once the necessary authorisation is in place.

The Financial Regulator has advised that where relevant a purchasing company will be subject to either the Regulator's enforcement powers or the enforcement powers in the EU jurisdiction of authorisation. I have asked the Financial Regulator to look into the case referred to by the Deputy.