Dáil Éireann Debate, Wednesday - 22 February 2023
103. Deputy Kathleen Funchion asked the Minister for Finance if he will consider a Government-sponsored life cover scheme operated by the State at a reasonable cost to the policy holders, to enable people with certain conditions that would not otherwise qualify for life cover through a commercial company; and if he will make a statement on the matter. [9189/23]
View answerI am aware of the issue of access to certain insurance services – in particular mortgage protection insurance – for individuals who have recovered from cancer and those with certain other conditions. This is a very sensitive matter for many in our community.
The Deputy has suggested a Government-sponsored scheme for affected individuals. While I appreciate the intent of such a proposal, I would be very cautious about this approach for a number of reasons.
Firstly, any State insurance scheme would be required to comply with the same prudential rules as private companies, as set out in the Solvency II Directive, which means that the cost would need to reflect the risk involved.
Secondly, there is no reason to believe that the State would be any better at managing risks than private insurers, and therefore be in a position to provide insurance more affordably than existing providers.
Thirdly, an unintended consequence of such an approach could serve to reduce competition, potentially increasing the cost of premiums elsewhere in the economy as insurers could seek to discontinue certain other lines if there is a view the State will insure these risks instead, particularly for market segments considered as unprofitable.
Nonetheless, there is work underway at the EU level in relation to individuals who have recovered from a previous cancer diagnosis when accessing insurance products. There are plans to adopt an EU-wide Code of Conduct on the “Right to be Forgotten” (RTBF) by next year. A RTBF is designed to prevent insurers taking into account a historical illness, such as cancer, when calculating the risk involved in insuring such individuals, thereby ensuring that they can access insurance on similar conditions to other applicants.
The introduction of such a Code of Conduct is an objective which is set out in “Europe’s Beating Cancer Plan” which was published in 2021. Last year, EU Health Commissioner Stella Kyriakides announced the launch of an EU-wide initiative to address the RTBF in all Member States, including working with Financial Services Commissioner Mairead McGuinness.
In addition, in ongoing negotiations at EU level on the Consumer Credit Directive , the inclusion of a RTBF provision is being considered as part of this legislative process.
The Department of Finance is monitoring these EU-level developments, while considering any separate measures introduced at the national level do not conflict with a future EU Code of Conduct. Given the complex and sensitive nature of this issue, this is the best course of action.
Domestically, I also understand that Insurance Ireland is currently reviewing this issue and its considered feedback on the investigation of RTBF policies is expected later this year.
Finally, as the Deputy may be aware, under existing legislation (Section 126 of the Consumer Credit Act 1995), lenders are permitted to provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally. For individuals, including those recovering from cancer or living with other conditions, who may experience difficulties acquiring mortgage protection insurance when securing a home loan, this is an important provision to be aware of.
