Michael McGrath (Cork South Central, Fianna Fail)
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73. To ask the Minister for Finance the number of whole life insurance policies in existence here; the average premium on such products; the average change in premiums at each review; and if he will make a statement on the matter. [26402/17]

Michael Noonan (Limerick City, Fine Gael)
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It is not possible to provide the details sought by the Deputy.  The Central Statistics Office does not produce statistics on the price or price variance of whole-of-life insurance.  Similarly, the Central Bank of Ireland does not collate any industry statistics on whole-of-life policies specifically, and neither does it collect any data in relation to average premium and average increase at each review.  

I am advised by the Central Bank, that this type of plan is designed to provide consumers with life cover for their whole life. As long as the policy holder makes regular payments and the payments are sufficient to maintain the chosen benefits, this type of cover will pay a lump sum on the death of the policy holder.

The regular payment into the plan covers the cost of providing the benefits chosen on the plan. In the early years the payments are higher than the cost of the policy holder’s benefits. The extra money paid goes into the plan fund. Protection benefits get more expensive as policy holders get older; usually as the plan progresses the payments begin to equal the cost of the chosen benefits. In the later years of reviewable protection plans, the cost of the benefits increases significantly. In order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.

The insurance company carries out regular reviews (the period in which these are completed can be 5 years, 6 years, 10 or 12 years depending on the product) to see if the consumers  regular payment plus any fund that has been built up is enough to cover their  chosen benefits for their reviewable protection plan.  During a policy review the insurance company may find that the consumer’s current level of payments is enough to maintain the level of cover that the consumer wants. The insurance company may also find that the current level of payments is not enough to maintain the level of cover desired by the consumer.

Finally, I might conclude as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. 

Consequently there is no role for my Department or the Central Bank in any post-sale reviews on whole-of-life policies. These are an individual matter for each insurance company and may differ from policy to policy.