Dáil Éireann debate -
Wednesday, 12 May 1999

Vol. 504 No. 5

Written Answers. - Insurance Ombudsman.

Bernard J. Durkan

Question:

40 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which an independent ombudsman exists in respect of the insurance industry with particular reference to the need to provide adequate consumer protection; if she has satisfied herself that sufficient consumer interests are protected; the plans, if any, she has to enhance the system; and if she will make a statement on the matter. [12268/99]

Brian O'Shea

Question:

48 Mr. O'Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the 15.5 per cent increase in the number of complaints received by the Insurance Ombudsman during 1998; if she has satisfied herself that the present voluntary ombudsman is adequate in view of the increase in complaints; and if she will make a statement on the matter. [12211/99]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I propose to take Questions Nos. 40 and 48 together.

The Office of the Insurance Ombudsman is only seven years in existence. Since its establishment in 1992, in all but one year, the number of cases received annually have increased. In my view, this is a clear indication of the outstanding success of alternative dispute resolution in the insurance sector. I have no doubt that as public awareness of the scheme continues to grow, the number of cases handled by the insurance ombudsman will exponentially increase. Indeed the insurance ombudsman has stated in her report for 1998 that one of her objectives will be to make the scheme better known. I would encourage and support the insurance ombudsman in her objective to improve awareness of the office and its functions.

As regards the adequacy of the office in terms of protecting consumer interests, it is widely recognised that the office provides an invaluable service to the consumer and that, in developing jurisprudence through the adjudication process, the decisions of the insurance ombudsman have the impact of changing existing sales practices within insurance companies to the benefit of the policyholder. The former insurance ombudsman had estimated that access to the alternative dispute resolution procedure under the scheme had saved the parties involved the equivalent of circa £35 million in legal fees over a five year period reviewed. The insurance ombudsman's annual reports are also a valuable source of information to our Department as regulator of the insurance industry. The insurance ombudsman, in her recent annual report, emphasised the importance of independence and of the provision of resources to carry out her responsibilities in accordance with the terms of reference. She reported satisfaction with the co-operation which she receives from the member companies.

I have no doubt that there is scope for evolution and development of the existing insurance ombudsman scheme. While this scheme has served the policyholder well, difficulties have arisen which have tended to undermine public confidence in a scheme which is structured and operated by the insurance industry. It is of paramount importance, therefore, that the industry continues to address the structural defects that have given rise to these difficulties. I am hopeful that our previous discussions with the insurance ombudsman's council and our Department's ongoing contact with the council and insurance ombudsman will be fruitful in that regard.

I would expect that the report of the implementation group for the single financial regulator will contain references to ombudsmen's schemes for the financial sector when it becomes available.