Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 15: To ask the Minister for Finance the extent to which the Financial Services Ombudsman has been in a position to identify the most frequently reported insurance companies alleged to have defaulted on mortgage protection and or life or other insurance over the past number of years with particular reference to the years from 2005 to date in 2012; if he will outline the most frequently proffered reasons for such default; the total estimated cost to the consumer; the action if any taken against any such companies who appear to be frequent offenders in this regard; and if he will make a statement on the matter. [9976/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

I am advised by the Financial Services Ombudsman that from 2005 to date, the Financial Services Ombudsman's Bureau (FSOB) has received 39,264 complaints from individuals against Insurance Companies. In that period, 17,138 complaints related to Insurance Products of which 819 are in relation to Mortgage Protection. The Financial Services Ombudsman is an out of Court redress body that is free to the complaint. Therefore there is no cost to the consumer of making a complaint to the Ombudsman.

Currently the FSOB does not identify Insurance Companies alleged to have defaulted on Mortgage Protection and or life or other insurance. There are no statistics available on the reasons given for default. The Central Bank and Financial Services Authority of Ireland Act 2004 provides that following a full investigation into a complaint and if the complaint is found to be wholly or partly substantiated, the Financial Services Ombudsman may direct the financial service provider to do one or more of the following:-

· Rectify or change the conduct complained of or its consequences

· Provide reasons or explanation for that conduct

· Change that practice

· Pay compensation up to a maximum of €250,000 or €26,000 annuity

· Take any other lawful action

The FSOB may only make a direction in relation to the complaint at hand. However, if an issue is systemic in nature then under Section 57CQ (2) of the Central Bank Act 2004 the Financial Services Ombudsman can make recommendations to the Central Bank that they address the problems that have been the source of the complaints.

I should point out that the Financial Services Ombudsman is independent in the carrying out of his duties and that there is no role for me in the day to day workings of the office.

The Deputy should be aware that I am currently considering the Financial Services Ombudsman's proposal about giving him the power to name, in certain circumstances, financial institutions that he has found to have acted unfairly. Once I have resolved certain legal issues identified, I will consider bringing appropriate proposals to Government. As the Deputy can appreciate this is a complex issue which requires detailed examination prior to bringing forward legislation. For example the criteria for publishing names would have to be identified in the legislation. Any amendment to the current legislation would need to be validated, justified and applied in an objective and reasonable manner to all financial institutions.