Maureen O'Sullivan (Dublin Central, Independent)
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269. To ask the Minister for Finance if he has had discussions with the Irish Insurance Federation regarding a situation facing elderly persons who took out insurance policies, several years ago, with a fixed rate and a defined death benefit, and who are now being told by their insurer that they will have to pay significantly more for their policy, or accept a reduced payout in the event of death; if he acknowledges that this is causing extreme stress for persons in their 70s and 80s, who took out policies in good faith; and if he will make a statement on the matter. [18176/15]

Michael Noonan (Limerick City, Fine Gael)
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At the outset it should be noted that in my role as Minister for Finance I have no power to intervene in such matters as the responsibility for day to day regulatory issues is a matter for the Central Bank of Ireland which is statutorily independent in the exercise of these functions.

Consumer issues are covered by the Central Bank's Consumer Protection Co de which, amongst other things, sets out a series of general principles about how financial service firms (including all insurance companies) should interact with their customers. The Code, however, does not prohibit or restrict an insurance company from increasing its annual premium rates, as this is a commercial decision for the company in question and is generally determined by such issues as higher claims volumes and the nature of the product.

While the Question does not specify the type of life insurance product taken out, it would appear that you are referring to a type of policy known as a "Whole of Life" policy, which pays a specified amount on death. "Whole of Life" policies cover the policyholder for their entire lifetime, or for as long as the policyholder wishes to continue to pay premiums. Neither I nor officials from my Department have have held discussions with Insurance Ireland. However, the Central Bank has previously advised that premiums for such policies are not fixed and can increase over the duration of the policy. "Whole of Life" policies which cover the policyholder for their entire lifetime while the policy is active must be distinguished from "Term Life" insurance policies which cover a fixed period of time such as 10 or 20 years and have a fixed premium unless index linked.

Most firms state in their current terms and conditions of "Whole of Life" policies that they will carry out regular post sale reviews. The post-sale policy review will determine if it is likely that the premium currently being paid can maintain the current level of life cover until the next review date. If it seems likely that the fund value of the policy will not be sufficient to maintain the policy to the next review date, the firm will recommend that the policyholder either increase their premium or reduce the level of life cover provided by the policy.

Policyholders who feel that the premium increases which have been proposed by their insurer are unfair are advised to refer the matter to the Financial Services Ombudsman for adjudication at .

With regard to concerns that advice given at the point of sale may have been misleading, section 57BX 3(b) of the Central Bank Act 1942, as amended, provides that a consumer may not make a complaint to the Financial Services Ombudsman if the conduct complained of occurred more than 6 years before the complaint is made. The Financial Services Ombudsman is an independent officer and it would not be appropriate for me to intervene in an individual complaint. However, officials in my Department have been informed by the Central Bank that if the consumers have documentary proof that they were given misleading information at the point of sale or at any time since then, this should be forwarded to the Central Bank of Ireland at:

Consumer Protection Codes DivisionCentral Bank of IrelandPO Box 91386 / 8 College Green Dublin 2