Written Answers Nos. 1-21
6. Deputy Charlie McConalogue asked the Minister for Finance if his attention has been drawn to the difficulties being experienced by livestock marts as a result of hikes in insurance premiums; if he has discussed measures to tackle this issue with his Cabinet colleagues; and if he will make a statement on the matter. [41680/17]
View answerI am aware that the livestock marts sector has encountered difficulties in relation to insurance matters, as this was the subject of a Topical Issue discussion in this House in July, and in addition, it has arisen as an issue in the course of the second phase work of the Cost of Insurance Working Group (CIWG) on employer and public liability insurance.
My understanding is that the major problem facing marts is access to cover, as there are a very limited number of companies willing to provide such insurance. Insurance Ireland has advised that this is because livestock marts have a significant exposure to injuries to employees and members of the public. Consequently premiums are reflective of the hazardous nature of this sector as well as its overall claims experience. However they have indicated that they are not aware of any recent major increases in the cost insurance for agricultural mart owners.
In order to try and mitigate the hazardous nature of the marts environment, Insurance Ireland has also advised that insurers have developed active risk management programmes to try to reduce the level of accidents and injuries. In addition, I understand that insurers have been working with marts with a view to implementing improvements in management practices and facilities to reduce claims as this is the key area to manage claim costs.
The Deputy should also note that in my role as Minister for Finance I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an acceptance of the risks they are willing to accept.
Nevertheless, I acknowledge that it is possible for the State to play a role in helping stabilise the insurance market and deal with factors contributing to the availability and cost of insurance, and that explains why the CIWG is currently considering the issue of employer and public liability cover including its impact on the agri-sector.
14. Deputy Clare Daly asked the Minister for Finance his plans to address the serious issues in regard to the regulation and oversight of mortgage providers brought to light by the tracker mortgage scandal; and if he will make a statement on the matter. [44661/17]
View answerThe Central Bank published an update on the Tracker Examination on 17 October last. As part of this update, the Bank released details of their engagement with lenders thus far and the enforcement actions the Bank has so far taken. However, as the Taoiseach noted last Wednesday during Leaders' Questions, the Government is not satisfied with the progress lenders have made to date and believes that impacted customers should by this time have had their tracker mortgages restored and where appropriate have received redress and compensation.
I have just concluded my meetings with the CEOs of Bank of Ireland, AIB, Permanent TSB, Ulster Bank and KBC to discuss the Tracker Mortgage Examination and I have made it clear that the Government is not satisfied with the progress lenders have made to date. All relevant mortgage lenders need to bring the Central Bank examination to a conclusion without any further delay, and to do so to the satisfaction of the Central Bank and more particularly to the satisfaction of their impacted customers. The Government is of the view that impacted tracker mortgage borrowers have been treated disgracefully by mortgage lenders, and that many borrowers have incurred considerable losses and in some cases even more significant harm. We should be clear that it was the mortgage lenders that caused this harm to their customers and that the primary responsibility for rectifying the problem rests with them. The time has now arrived for the banks to finally act in the best interest of their impacted mortgage customers. The Government fully supports the Central Bank it its work to bring this very important industry wide examination to the earliest possible conclusion.
16. Deputy Maureen O'Sullivan asked the Minister for Finance the way in which the recent budgetary measures will reduce levels of poverty. [44700/17]
View answerThe impact of the Budget on poverty levels is assessed using the ESRI SWITCH model, which is a tax-benefit micro-simulation model used by Government Departments, including my own, to assess the distributional impact of the Budget.
The Department of Employment Affairs and Social Protection (DEASP) will produce and publish a Social Impact Assessment of Budget 2018 in the coming weeks on their website. This will use the SWITCH model to consider the impact of the Budget on poverty levels, in particular how the ‘at risk of poverty’ rate changes as a result of the social welfare and tax measures contained in Budget 2018. My Departments provide inputs to DEASP when they are preparing the Social Impact Assessment. However, preliminary analysis carried out by my Departments indicates that, in overall terms, as a result of Budget 2018, households experience an average increase in the order of 1% in weekly disposable income. Gains are highest for the first (lowest income) quintile at over 2 per cent and lowest for the fifth (highest income) quintile at below 1 per cent, pointing to a progressive Budget package. Notwithstanding the usefulness of SWITCH in providing results which are representative of the full population of households in Ireland, it has a number of notable shortcomings. It does not, for example, model the impact of expenditure on public services such as health or education, which has an important impact on alleviating poverty.
As a tax-benefit model, however, SWITCH does show the impact of tax and social welfare changes announced in the Budget. I note that Ireland has the second most progressive income tax system in the OECD, meaning that those on higher incomes pay proportionally more in tax than those on lower incomes. By definition, this implies that any tax reduction will benefit those who earn most. The SWITCH model results for the Budget tax package reflect this fact; it is a consequence of having such a progressive tax system in the first place.
The CSO produces statistics on poverty using the Survey of Income and Living Standards (SILC). The survey provides data on household income, poverty and deprivation rates, and income inequality. The latest SILC data relate to 2015 and indicate that the ‘at risk of poverty’ rate in Ireland was 16.9%, below the EU28-average. The ‘at risk of poverty’ rate represents the percentage of the population in households where equivalised disposable income per person is less than 60% of the median.
If all social transfers were excluded from income, the ‘at risk of poverty’ rate would have been 46.3% in 2015, according to the same survey. I note that the difference between two rates points to the effective role of the overall social welfare system in combatting poverty.
This is also reflected in the fact that Ireland’s Gini co-efficient for disposable income is below the OECD-average (2014 is the latest year for which data are available). The Gini co-efficient is the most common measure of income inequality and the lower it is the lower the level of income inequality. Indeed, Ireland’s tax and welfare system lead to the largest absolute reduction in income inequality in the OECD.
In summary, the discretionary measures announced in Budget 2018 will result in income gains, with the greatest impact for households on the lowest incomes. I look forward to seeing DEASP’s assessment as to its impact on poverty. I reiterate that the tax and social welfare system overall continue to reduce income inequality and reduce poverty in Ireland.
17. Deputy Clare Daly asked the Minister for Finance if he is satisfied that the avenues of complaint available to mortgage customers who may have been overcharged on their mortgages, including, for example, complaints to the Financial Services Ombudsman, are fit for that purpose. [44660/17]
View answerThe first avenue of complaint for any customer aggrieved by an action of a regulated financial service provider is to complain to the entity concerned. The Central Bank’s Consumer Protection Code provides that “A regulated entity must have written procedures in place for the effective handling of errors which affect consumers.” The Code also specifies the procedures to be followed in the event of a complaint.
When the complaint is finalised, the Code requires that the consumer be informed that they can refer the matter to the Financial Service Ombudsman.
If the consumer is not satisfied with the outcome of the complaint, I would strongly advise them to pursue a complaint with the Financial Services Ombudsman. The Ombudsman’s website has a simple on-line complaint form. Of course, it will also accept complaints in writing.
The Financial Services Ombudsman has informed me that he tries, in the first instance, to resolve complaints in an informal manner by mediation through its dedicated Dispute Resolution Service. Where disputes are not resolved through mediation the FSO will investigate and adjudicate the complaint. The FSO has a wide range of powers and can direct compensation of up to €250,000 and direct rectification which could, for example, include redress where a borrower has been charged the incorrect interest rate.
As the Deputy may be aware, the time limit for long term financial services was recently extended and consumers are now able to submit complaints within three years of becoming aware of the reason for their grievance. The legislation also allows a consumer whose complaint was previously refused as outside time limits to submit a complaint.
It is my role as Minister for Finance to ensure that an appropriate framework is in place to allow consumers a simple and effective route to resolve complaints and I consider that such a framework is in place. The Financial Service Ombudsman provides a reasonably quick means of resolving complaints at no cost to the consumer. I am, aware of the discussions at the Finance and Public Expenditure and Reform and Taoiseach Committee and will be examining whether any further changes to the framework are required.
The Government believes the behaviour of the banks in regard to removing people from tracker mortgages was unacceptable. I have met or will meet the CEOs of the main banks, Bank of Ireland, AIB, Ulster Bank, PTSB and KBC, this week and will be making a statement when these meetings have concluded.
18. Deputy Eugene Murphy asked the Minister for Finance the number of mortgage holders who have entered into a restructuring arrangement that included lengthening the term of the loan in an attempt to deal with mortgage debt in the past five years; and if he will make a statement on the matter. [44539/17]
View answerAs at end-June 2017, the Central Bank figures state that 120,398 outstanding (PDH) mortgage accounts were restructured; 15,371 restructures (12.8%) were term extensions only, without any other restructure arrangement in place. In accounts where restructures include term extension as a part of the modification (i.e. multiple restructure types), 30,029 outstanding accounts incorporated a term extension as at end-June 2017.
In relation to the number of mortgage holders that have entered into a restructuring arrangement that included lengthening the term of the loan to deal with mortgage debt in the past five years , the Central Bank have informed me that 373,886 Principal Dwelling Houses (PDH) mortgage accounts entered restructuring arrangements over the past 5 years (Q3 2012 - Q2 2017).
The Central Bank of Ireland Residential Mortgage Arrears and Repossessions Statistics show that during this period, 35,588 account restructures were agreed incorporating a term extension. This restructure total includes both accounts in arrears, and accounts where no arrears apply. These include first time restructures, multi-restructure arrangements and further modifications of existing restructure. In some cases, term extension is part of a wider modification, involving multiple restructure types.
This 373,886 PDH figure represents accounts ‘added’ to the restructure category. It includes both accounts in arrears, and accounts where no arrears apply and includes first time restructures and further modifications of existing restructure over the past 5 years. An addition could represent a new restructure arrangement for that account, and could be a second, third or subsequent restructure arrangement for a particular account. The figure excludes double counting of accounts that have multiple restructure arrangements in a given quarter, these accounts are counted once in a given quarter. However, an account may be included multiple times if there were subsequent restructure arrangement for a particular account over the 5 year period.
Further breakdowns are not available from the Central Bank.
Where a borrower actively engages with their lender it is more likely that an equitable arrangement will be found helping the borrower to stay in their family home. I would urge borrowers in arrears, who have not done so, to contact their lender or MABS for an independent assessment of their situation and advice on options.
I would also like to draw the Deputy's attention to recent progress made by the Government in assisting those in mortgage arrears. The Abhaile service helps borrowers in arrears to find the best solutions and keep them, if possible, in their own homes. This is assisting borrowers, particularly those in longer term arrears. A dedicated adviser will work with borrowers in arrears and their lender to find the best solution for them.
Borrowers can get free advice from an expert financial adviser who can help them to work through their financial situation and where possible help them to remain in their home. An Expert adviser could be from MABS or a Personal Insolvency Practitioner (PIP) or an accountant.
Borrowers may also need legal advice and under Abhaile they can have a free meeting with a solicitor.
If called to court to face repossession proceedings on their home, they will be able to meet a Duty Solicitor at the court. A MABS staff member will also be present at court to help them.
A Helpline is available Monday to Friday and a face-to-face service which is completely free, confidential and independent is also available in more than 60 MABS locations nationwide.
19. Deputy Michael McGrath asked the Minister for Finance the steps that will be taken to ensure the attention of all persons is drawn to their rights regarding insurance claims arising from Storm Ophelia; his plans to engage with the insurance industry to ensure that the storm is not used as a cover for further increases in household and business insurance premiums; and if he will make a statement on the matter. [44697/17]
View answerAt the outset, the Deputy should note that all insurers operating in the Irish market are regulated under conduct of business rules by the Central Bank. Consequently they are required to comply with the Consumer Protection Code which sets out the rights of consumers including how claims are handled.
In relation to the bringing to the attention of policyholders their rights in relation to insurance claims arising from Storm Ophelia, the Competition and Consumer Protection Commission (CCPC) has updated its website accordingly and the information can be found at: https://www.ccpc.ie/consumers/2017/10/18/can-i-make-insurance-claim-storm-ophelia/.
In addition, my officials have been in touch with Insurance Ireland about this matter. In response they have indicated that business insurance policies will provide cover for storm damage to premises and stock. Such policies will also cover for business interruption which is triggered when there has been storm damage to the premises. They have advised however that it is important for businesses to contact their insurance company or broker after the event and guidance will be provided on making a claim.
With regard to household buildings and contents insurance, Insurance Ireland has also advised that policies will cover damage caused by storms. Insurers will usually pay for the cost of temporary repairs, so policyholders should keep receipts. Insurers will also usually pay for the cost of alternative accommodation, if the home becomes uninhabitable. However, householders should check the full extent of their policies and contact their insurer or broker for further information.
Finally, the Deputy will be aware that I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in particular cases as these matters are of a commercial nature, and are determined by insurance companies based on the risks they are willing to accept. However, my own view is that it is too early yet to determine what the impact of storm Ophelia will have on future insurance premiums, so I will be indicating to insurers that they should be careful in rushing to judgement on the need for future price increases.
20. Deputy Mick Wallace asked the Minister for Finance the number of current and former NAMA staff who listed previous employment in an investment fund or property company, either foreign or Irish, in their statement of interests, assets and liabilities to the chief executive officer of NAMA when joining the agency; the name of each investment fund or property company in question; and if he will make a statement on the matter. [44726/17]
View answer21. Deputy Mick Wallace asked the Minister for Finance if he is satisfied that the NAMA system of evaluating possible conflicts of interest of NAMA officials under section 42 of the National Asset Management Agency Act 2009 is robust in assessing whether a person may hold a conflict of interest regarding their previous employment; if a register of conflicts of interest is held by NAMA; the system in place if a NAMA official is deemed to hold a conflict of interest with regard to the way in which it is managed on a day to day basis; and if he will make a statement on the matter. [44725/17]
View answerI propose to take Questions Nos. 20 and 21 together.
I wish to advise the Deputy that disclosures furnished by NTMA employees who are assigned to NAMA, pursuant to section 42(3) of the NAMA Act 2009, are considered by the NTMA in conjunction with NAMA, prior to their assignment, to ensure compliance with section 42(2) of the Act. This section requires the NTMA to ascertain, to its satisfaction, that the employee has no material conflict of interest, whether actual or potential, in respect of his or her proposed assignment to NAMA.
In addition, NAMA officers are subject to a number of additional obligations regarding disclosure of interests. They are holders of designated positions of employment for the purposes of the Ethics in Public Office Act 1995, which obligates them to furnish an annual statement of interests and a statement of material interests.
Further obligations on NAMA staff are outlined in the ‘Code of Practice-Conduct of Officers of NAMA’, which is updated and submitted to me for approval on an annual basis. The Code is available on the NAMA website and sets out the best practice standards of principles and practice in relation to confidentiality and conflicts of interest. The Code underscores NAMA’s commitment to the highest standards of conduct and has been prepared to assist NAMA staff in understanding their duties, rights and obligations. In particular I would refer the Deputy to Part II of the Code which deals with Conflicts of Interest and references obligations which are additional to NAMA officers’ statutory obligations.
NAMA recruits staff with a diverse range of experience and expertise and with backgrounds in property, banking, investment, law, planning and corporate finance, among other disciplines. This expertise has been, and continues to be, crucial in ensuring that NAMA is in a position to achieve its stated objective under Section 10 of the NAMA Act 2009, which is to achieve the best financial return for the State.
I am advised that it is not possible to provide the Deputy with information on the number of current and former NAMA officers who were previously employed in investment funds and property companies as this would require the NTMA to manually extract the information from more than 600 curricula vitae of current and former staff members. It is not possible to identify the specific funds and companies for the same reason. I am also advised that release of such information could lead to the identification of specific individuals and that this could have Data Protection implications.
