Dáil Éireann Debate, Wednesday - 13 January 2016
195. Deputy Pearse Doherty asked the Minister for Finance the guidelines in place to ensure an insurance broker is independent of insurers or assurance providers and that any connection to an insurer or assurance provider is communicated to customers and potential customers; and if he will make a statement on the matter. [46624/15]
View answerI am advised by the Central Bank of Ireland that its 2012 Consumer Protection Code requires that all regulated entities seek to avoid conflicts of interest. Where conflicts of interest arise and cannot be reasonably avoided, a regulated entity must disclose the general nature of the conflict of interest to consumers and must ensure that the conflict of interest does not result in damage to the interest of consumers. If an intermediary firm is tied to an insurance firm this must be disclosed in the Terms of Business document which must be given to a consumer prior to providing services to the consumer. Where an intermediary is tied to a single product producer for a particular product or service it must disclose this fact to the consumer in all communications with the consumer in relation to that product or service.
In addition, Part IIIA of the second Markets in Financial Instruments Directive provides that Member States must require that insurance intermediaries and insurance undertakings are transparent in their dealings with customers and identify and address any relevant conflict of interest. This directive must be transposed into Irish law by 3 July, 2016.
Finally, the Insurance Distribution Directive, which was adopted by the Council in December 2015 following adoption by the European Parliament, provides that Member States shall require that insurance distributors may not incentivise their staff to recommend a particular insurance product to a customer when the insurance distributor could offer a different insurance product which would better meet the customer's needs. The directive also provides that Member States shall, at least, require that insurance distributors must also advise consumers of any significant control if the intermediary by the insurance undertaking or its parent; any contractual obligation to conduct insurance distribution business exclusively with one or more insurance undertakings; and the nature of remuneration received from an insurance undertaking in relation to the sale of the insurance contract. This directive must be transposed into Irish law by the end of 2017.
