Written Answers. - Statement by Minister Bruton on Unauthorised Insurance.
Mr. Richard Bruton, T.D., Minister for Enterprise and Employment today (Thursday, 22nd December, 1994) issued the following statement on unauthorised insurance.
In March of this year allegations were made to the Department of Enterprise and Employment that an insurance brokerage was placing insurance business with entities which were not authorised to underwrite insurance business in this country. Following initial inquiries it was decided that the nature and the potential scale of the problem warranted a formal investigation by authorised officers of the Department.
The immediate concern in the investigation was the protection of the clients of the brokerage concerned which brokerage informed the Department in mid-April that the insurance covers in question had been put into run-off and would expire in mid-June and that efforts were being made to have alternative cover arranged with authorised insurers.
In September, 1994 the Department was informed that the majority of the risks had been transferred, with retrospective effect from March 1994 to an insurer based in another EU member state. Following further investigations by the Department it became clear that this insurer had not received approval from the insurance supervisory authority in its home member state to transact insurance business in the Irish market. The investigations were then completed and a file was forwarded to the office of the Director of Public Prosecutions.
The Department of Enterprise and Employment, has a duty to act when possible breaches of the law are brought to its attention and that duty was met by the inquiries and subsequent investigation into the allegations received in March 1994.
Throughout the inquiries and the ensuring investigations the Department was at all times concerned to safeguard to the extent that it reasonably could, the position of the clients of the brokerage concerned.
Since August the Department has become aware that a small number of brokers may have placed a limited amount of business with insurers not approved to operate in the Irish market.
Ongoing inquiries are being made into these matters by the IBA (Irish Brokers Association) which is the recognised regulatory body in relation to its member's compliance with insurance legislation. The IBA is obliged to inform the Department of instances where it has concluded that a breach of the statutory regulatory rules may have occurred.
Minister Bruton would like to remind insurance intermediaries that under the Code of Contract for Insurance Intermediaries they have a duty to act to the highest professional standards and in the best interests of their clients. Consequently they should ensure that all insurance effected by them on behalf of their clients must be placed with insurers which are approved to operate in this country. Where any doubts emerge in relation to the status of an insurer the Minister would expect insurance intermediaries to so inform their clients. It is, of course, open to any insurance intermediary to check the status of any particular insurer with the Minister's Department.
The Minister would like to advise all persons taking out insurance that they should, in their own interest, be satisfied that the insurance is being placed with an insurer which is approved to operate in this country. The name of the insurer is normally clearly discernible on all policy and supporting documentation.
In addition, where dealing through an insurance intermediary, that intermediary is obliged to provide clients with receipts specifying, among other things, the name of the insurer with which a policy is to be placed or renewed. Anyone who is in doubt whether an insurer is approved to operate in this country should contact the Insurance Section of the Department of Enterprise and Employment Telephone (01) 661 44 44 ext. 2714.