At the outset, the Deputy should note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland 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 assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level that they should apply to particular categories of individuals, nor am I in a position to direct them to provide cover to such individuals.
It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer life insurance cover and what terms to apply. These factors can include age, health, family medical history, occupation and lifestyle. In addition, these may be determined or linked to the length of time with which such a policy may last. Furthermore, my understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market, and that they will price in accordance with their own past claims experience.
In relation to life insurance cover generally, I am informed by Insurance Ireland that life insurance operates on the principle of the pooling of risks and that policyholders whose state of health is below average and who therefore have a higher than average chance of claiming from the pool pay a higher than average contribution. When applying for life assurance, a customer will be asked on the application form detailed health questions and other questions about occupation, hazardous hobbies and previous insurance history. Thus, the insurance company obtains a very complete picture of the individual’s state of health which would include physical and mental health. Each application is considered individually and the decision on whether to offer cover and on what terms depends on the facts of that particular case. In cases where an individual applies for cover and is turned down, or is offered cover at an increased premium (or subject to special conditions), then he/she can request that the insurer's Chief Medical Officer write to his/her doctor to explain the reason for the underwriting decision. They also state that the process of underwriting life insurance policies seeks to identify and assess all aspects of an individual’s physical and mental health which may be relevant to the cover being applied in order to ensure that the underwriting decision is a fair one to the individual in question.