Dáil Éireann debate -
Tuesday, 22 Oct 1991

Vol. 411 No. 4

Written Answers. - Insurance Intermediaries.

P. J. Sheehan

Question:

113 Mr. Sheehan asked the Minister for Industry and Commerce if he will outline (a) the position of tied insurance agents who operate as companies in an insurance brokerage and thereby do not reveal to their clients that they are tied agents and cannot offer independent advice on insurance matters; (b) whether the Irish Insurance Compliance Bureau which validates the brokerage for his Department are unable or unwilling to deal with this question in relation to a particular insurance brokerage and (c) whether there is any redress for a policy holder if an insurance company refuse to explain contract terms and incorrectly calculate their dividend statement; if his attention has been drawn to the fact that in order to issue court proceedings, the calculations would have to be checked by an actuary and that actuaries appear to be interested only in corporate work and will not provide a service for individuals; and if his attention has further been drawn to the fact that the Irish Insurance Federation which is the policing body for insurance companies, are unable or unwilling to answer any questions on this particular problem; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

The position with regard to all insurance intermediaries is that they are subject to the provisions of the Insurance Act, 1989. A responsibility is placed on insurance companies to establish that any intermediary whom they appoint is complying with the provisions of the Act.

In addition insurance intermediaries, including tied agents, are required to observe the terms of the code of conduct for insurance intermediaries and accompanying guidelines.

Any indication that an insurance intermediary may not be complying with the provisions of the Act or the code of conduct would be a matter for the insurer(s) with which that intermediary holds an agency appointment or the Irish Brokers Association who are the broker representative body recognised by the Minister under the Act, where the intermediary is a member of the association.

Tied agents are required to disclose their status under the Act to their clients and to name the insurance company with whom they have a tied agency agreement. This is to be stated orally to the client and in writing on all such agents' business notepaper.

Because of the onus which the 1989 Act places on insurers to make reasonable inquiry as to the compliance with the Act of any intermediary to whom they propose to grant an agency appointment or any already appointed intermediary to whom they propose to pay commission, the insurers established a central checking body, the Insurance Intermediary Compliance Bureau, which would carry out certain compliance checks on intermediaries on their behalf. However, the responsibility regarding the compliance of intermediaries with their obligations under the Act remains with the individual insurers and/or the Irish Brokers Association.

It is understood that it is the practice of insurers to supply such information regarding an insurance contract as the policy holder may reasonably request.

It is understood that in addition to actuaries who are directly employed by insurance companies there are independent actuaries who will undertake work for private as well as corporate clients.

The Irish Insurance Federation are a trade representative body and as such have no statutory function. However, it is understood that where a problem is brought to the federation's attention or a complaint is made regarding one of their members it is their practice to investigate such matters and to subsequently respond to the complainant.