Gary Gannon (Dublin Central, Social Democrats)
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171. To ask the Minister for Finance if his attention has been drawn to the matter of persons with diabetes who cannot get mortgage funds released due to life assurance companies deferring and declining due to underlying illness; and if he will make a statement on the matter. [42134/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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At the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses.  This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.  Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.

It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer life insurance and what terms to apply.  These can include age; health; family medical history; occupation; and lifestyle.  In addition, these may be determined or linked to the policy duration.  In the case of mortgage protection policies, these tend to be over the lifetime of the repayment schedule.  In addition, my understanding is that different insurers do not use the same combination of rating factors. Accordingly, prices and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.

My officials contacted Insurance Ireland, the representative body for such providers, on this issue recently.  It stated that while most customers are still able to get life; critical illness; or mortgage protection insurance at this challenging time it is aware of a small number of individual cases where a final decision on some applications is being postponed for a period of time where applicants have an underlying health condition, due to COVID-19. However, it stated that while unaware of any cases where life cover has been denied, such policies are assessed on a case-by-case basis and that underlying health conditions, such as Type 1 diabetes, will be taken into account by the underwriters, as was the case pre-COVID-19. Insurance Ireland further noted that it understands that mortgage protection is not a universal requirement by banks, who in practice apply the following exceptions to holding life cover when an applicant applies for a mortgage:

- The applicant already has sufficient life cover.

- The applicant is over age 50.

- The mortgage is not on the applicant’s principal private residence.

- The applicant cannot get insurance, or only at a much higher rate than normal.

Notwithstanding this, the Deputy will be aware that both Minister of State Fleming and I have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code.  The Government will continue to work to protect customers during and after the COVID-19 crisis, and engage with the insurance industry in relation to how it responds to the needs of its customers. This commitment is included in the Programme for Government.

Finally, where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.