Written answers

Tuesday, 16 January 2018

Department of Finance

Insurance Industry Regulation

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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202. To ask the Minister for Finance the rules governing the practice of certain insurance firms automatically renewing a home insurance policy and taking payment from a person's bank account in the absence of receiving communication from the customer; if he plans to renew the policy; and if he will make a statement on the matter. [55010/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  I have no role in day to day supervision of the insurance industry, as this is the responsibility of the Central Bank of Ireland.

Consequently, I submitted this question to the Central Bank of Ireland for its observations. It has informed me that all regulated entities, including insurance undertakings and insurance intermediaries, must comply with the Central Bank’s Consumer Protection Code (“the Code”).  The Code provides that a regulated entity must act honestly, fairly and professionally in the best interests of its customers and the integrity of the market, and must make full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer.  A regulated entity must ensure that all information it provides to a consumer is clear, accurate, up to date, and written in plain English.  Key information must be brought to the attention of the consumer, and the method of presentation must not disguise, diminish or obscure important information.

Provision 4.30 and 4.31 of the Code provide that: “A regulated entity providing an insurance quotation to a consumer must include the following information in the quotation, assuming that all details provided by the consumer are correct and do not change: a) the monetary amount of the quotation; b) the length of time for which the quotation is valid; and c) the full legal name of the relevant underwriter.” and “A regulated entity must set out clearly in the quotation provided to the consumer any warranties or endorsements that apply to the policy. Where the quotation is provided on paper or on another durable medium, this information must not be in a smaller font size than other information provided in the document.”

In addition, the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 provides that the insurer shall, not less than 15 working days prior to the date of expiry of a policy of insurance, where the insurer wishes to invite a renewal, issue to the client in writing a notification of renewal of the policy of insurance, or issue to the client in writing a notification that it does not wish to invite a renewal unless the insurer has reason to believe that the client would not wish to renew the policy.  Finally, Schedule 3 of the Unfair Terms in Consumer Contracts Regulations 1995 sets out the indicative list of terms which may be regarded as unfair. Part (h) cites terms “automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express this desire not to extend the contract is unreasonably early” as being unfair.

In light of the above, I am satisfied that the legal framework provides sufficient protection to consumers that such practices, as described in the question, are covered under the existing framework.

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