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Insurance Coverage

Dáil Éireann Debate, Thursday - 11 March 2021

Thursday, 11 March 2021

Questions (49)

Marian Harkin

Question:

49. Deputy Marian Harkin asked the Minister for Finance the remedies available to those who have been refused mortgage protection insurance (details supplied); and if he will make a statement on the matter. [13731/21]

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Written answers

As the Deputy will appreciate, while I have taken note of the situation as set out in the details supplied by the Deputy, it is not appropriate for me to comment on specific cases. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct such companies to provide cover to specific individuals or businesses. This position is reinforced by the EU's Solvency II framework. Consequently, I am not in a position to direct insurance firms as to their business activities, including requesting them to provide cover to such individuals.

It is my understanding that insurers use a combination of rating factors in making individual-level decisions on whether to offer life insurance, including mortgage protection 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, these tend to be over the lifetime of the repayment schedule. In addition, my understanding is that different insurers use different combinations of rating factors. Accordingly, prices and availability of cover varies across the market, and will be priced in accordance with specific firms’ prior claims experience.

Having said the above, I am aware of reports of some customers experiencing issues in obtaining mortgage protection cover as a result of having higher risk conditions particular in the context of COVID-19. The Deputy will be aware that both I and Minister of State Fleming have consistently 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. Accordingly, the Government will continue to engage with the insurance industry in relation to how it responds to, and works to protect its customers needs. This commitment is included in the Programme for Government.

My officials recently contacted Insurance Ireland, the representative body for such providers, on the issue of mortgage protection insurance. It stated that while most customers are still able to get life; critical illness; or mortgage protection insurance at this challenging time it is aware of a small number of individual cases where a final decision on some applications is being postponed for a period where applicants have a COVID-19-related health condition. However, it stated that while unaware of any cases where life cover has been denied, such policies are assessed on a case-by-case basis and that underlying health conditions are taken into account by the underwriters, as was the case pre-COVID-19. Insurance Ireland has also said 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.

Finally, where somebody feels they have been treated unfairly 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.

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