Dáil Éireann Debate, Wednesday - 24 February 2021
162. Deputy Seán Haughey asked the Minister for Finance if his attention has been drawn to the fact that mortgage applicants are being refused mortgage protection insurance if they have had Covid-19 within the past six months even in cases in which they have fully recovered from the virus; if he will intervene with the industry to prevent this practice; and if he will make a statement on the matter. [9460/21]
View answerWhile I have an appreciation of the difficulties individuals may find themselves in as a result of the COVID-19 pandemic, neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.
It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer life insurance and what terms to apply. These can include age; health; family medical history; occupation; and lifestyle. In addition, these may be determined or linked to the policy duration. In the case of mortgage protection policies, these tend to be over the lifetime of the mortgage repayment schedule. In addition, my understanding is that different insurers do not use the same combination of rating factors. Accordingly, prices and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.
My officials contacted Insurance Ireland, the representative body for such providers on this issue recently. It stated that it is aware of a cases where a final decision on applications is being deferred in instances where applicants have displayed symptoms of COVID-19, been referred for, or undergoing COVID-19 testing, or had a positive COVID-19 diagnosis. It also stated that it is normal practice to defer a decision on any condition in these cases. However, it also stated that is unlikely that once the applicant has fully recovered from an illness that it would have any impact on the policy they are seeking to take out, although this does depend on the individual case and the severity of the impact of the infection. Insurance Ireland further noted that it understands that mortgage protection is not a universal requirement by banks, and that there are waiver conditions set out in the Consumer Credit Act where the lender may be able to proceed without the protection cover in place for mortgages in certain situations and this is at the lender’s discretion.
Notwithstanding this, the Deputy will be aware that both I and Minister of State Fleming have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code. The Government will continue to work to protect customers during and after the COVID-19 crisis, and engage with the insurance industry in relation to how it responds to the needs of its customers. This commitment is included in the Programme for Government. Minister of State Fleming is due to meet with Insurance Ireland this week and the industry’s response to COVID-19 issues will be on the agenda.
Finally, where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
