Ann Phelan (Carlow-Kilkenny, Labour)
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Question 83: To ask the Minister for Finance if his attention has been drawn to the widespread practice of mis-selling of insurance protection policies imposed by lending agencies on mortgages and other borrowing products in past years, which in some cases amounted to an extortive demand; and if he will investigate the matter by seeking details from all such lending institutions from all their data on these products with the aim of compensation to those who were or are victims of this shameful and unjust practice. [10590/11]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's Consumer Protection Code requires that a regulated entity must ensure that, in all its dealings with customers and within the context of its authorisation, it acts honestly, fairly and professionally, in the best interests of its customers the integrity of the market, and acts with due skill, care and diligence in the best interests of its customers. Any breach of the Consumer Protection Code may be considered under the Central Bank's Administrative Sanctions Procedure. If a consumer feels that he/she has been improperly treated, or that he/she has grounds for complaint for some other reason, he/she may complain to the institution directly. If he/she feels that the complaint has not been addressed to his or her satisfaction he/she may refer the complaint to the Financial Services Ombudsman, who deals with individual consumer complaints. The Ombudsman will adjudicate on the complaint on the basis of the regulatory requirements on the firm.

The Consumer Protection Division of the Central Bank of Ireland is conducting a themed inspection of Payment Protection Insurance (PPI) policies sold to individuals who subsequently had their claims turned down. The scope of this themed inspection is limited to establishing whether PPI policies were sold to consumers who would not have been eligible to make a redundancy/unemployment claim under the policy and the information should have been known or gathered at the time of the sale. This will be achieved by reviewing both the claim file for declined claims alongside the relevant sales file for the policy. Feedback will be issued in the form of a letter to the industry following the review, together with suggested proposed changes (if any are identified) to current practices. In addition, if it is necessary and if it is found that firms are not in compliance the appropriate regulatory action will be taken.

In 2009 the Financial Regulator (now the Central Bank of Ireland) conducted an examination of the claims handling processes for PPI policies. The examination sought to identify possible claims-related issues before they arise and assess whether reasons for declining to pay out on policies were appropriate. It did not focus on the sales process of PPI products which are typically sold through banks, building societies, credit card providers, credit unions and, to a lesser extent, independent brokers.

The examination found that: Where claimants have satisfied the terms and conditions of the policy, the insurance companies have carried out the claims handling process in an efficient and fair manner. ·The highest number of declined claims on illness/disability grounds related to claimants' pre-existing medical conditions, while the highest number of declined claims on unemployment/redundancy grounds related to employment criteria not being met by claimants. ·In the course of the onsite inspections it was noted that some claims can be delayed while the firm is waiting on verification from third parties such as doctors and previous employers.

The Financial Regulator wrote to all providers to inform them of the findings of the themed inspection and advised firms that: ·Sellers of these products should ensure that the relevant exclusions, together with qualifying periods at the start of policies, are highlighted to the consumer at the point of sale. ·Insurance companies should ensure that the sellers of regular premium PPI products are aware that the premiums for these policies are not necessarily fixed and may increase. As this may affect whether the consumer can afford the premiums in the subsequent years, firms need to impress on the PPI sellers that this should be highlighted in any product sales material. ·The present practice across the PPI industry is that, unlike, for example, life assurance policies, firms do not gather information from customers on their state of health or medical history. This information is analysed at the time of a claim being assessed. Firms must ensure that this practice, and its consequences in relation to claims handling, are fully explained to consumers at point of sale. ·Firms should endeavour to ensure that consumers are not disadvantaged due to excessive delays on the part of third parties in supplying claim related information. My Department will consult with the Central Bank on ongoing monitoring in this regard.