Finian McGrath
Question:45. Deputy Finian McGrath asked the Minister for Finance the position regarding life insurance in respect of persons (details supplied); and if he will make a statement on the matter. [30494/14]
View answerThursday, 10 July 2014
Questions (45)
Written answers
At the outset it should be noted that I, in my role as Minister for Finance, have no power to intervene in individual insurance cases. The responsibility for day to day regulatory issues is a matter for the Central Bank of Ireland which is statutorily independent in the exercise of these functions.
I have made inquiries with the Central Bank on the matter. While you do not specify what type of life insurance product was taken out, it would appear to be a "Whole of Life" policy which pays a specified amount on death. "Whole of Life" policies cover the policyholder for their entire lifetime, or for as long as the policyholders wish to continue to pay premiums. The Deputy has not stated the reason why the couple in question was 'forced' to cash in the insurance policy and the reason may have been that they decided that the increased premiums were too expensive. The Central Bank has advised that premiums for such policies are not fixed and can increase over the duration of the policy. These are distinguished from "Term Life" insurance policies which pay a specified amount on death during a fixed period of time such as 10 or 20 years and have a fixed premium unless index linked.
Consumer issues are covered by the Central Bank's Consumer Protection Code which, amongst other things, sets out a series of general principles about how financial service firms (including all insurance companies) should interact with their customers. The Code, however, does not prohibit or restrict an insurance company from increasing its annual premium rates, as this is a commercial decision for the company in question and is generally determined by such issues as higher claims volumes, and the nature of the product.
Policyholders who have a complaint about an insurance company, may refer the matter to the Financial Services Ombudsman for adjudication http://www.financialombudsman.ie/.