Vol. 495 No. 7
79 Mr. Bell asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will introduce a statutory scheme for an insurance ombudsman in view of the experience of the first insurance ombudsman as outlined to the Committee on Enterprise and Small Business. [21150/98]
The maintenance of the autonomy of an ombudsman is the cornerstone of any ombudsman scheme whether privately or publicly funded. This is essential in order that such schemes have the complete confidence and allegiance of all those who use them and of the public in general whose interest they serve. The former insurance ombudsman, in her presentation to the Oireachtas Joint Committee on Enterprise and Small Business in July, expressed her views of difficulties that had arisen in the administration of the insurance ombudsman scheme and which, in her view, were militating against its effectiveness as an independent and fully transparent office. At the same time the success of the insurance ombudsman scheme as an alternative and costeffective dispute resolution service was recognised. The former insurance ombudsman confirmed that it provided an invaluable service to the consumer and that, in developing jurisprudence through the adjudication process, her decisions had the impact of changing existing sales practices within insurance companies to the benefit of the policyholder. She estimated that access to the alternative dispute resolution procedure under the scheme had saved the parties involved the equivalent of £34 million to £35 million in legal fees over a five year period. It is particularly regrettable, therefore, that difficulties should have arisen in the administration of the scheme and it is important that the concerns expressed by the former insurance ombudsman, the Joint Oireachtas Committees and by individual Members of this House and of the Seanad be addressed in a constructive and expeditious manner. I am also mindful that the newly appointed insurance ombudsman, Ms Caroline Gill, must be given time to form her own views of her role and the degree of autonomy that is appropriate to the discharge of the ombudsman function. As a follow-up to my previous discussions with representatives of the insurance ombudsman's council this year, I and my officials met with the council chairman and the insurance ombudsman on 28 October. At that meeting there was a full and frank discussion of the specific issues presented by the former insurance ombudsman to the Oireachtas Joint Committees and the committee's concerns in that regard. In the course of my discussions I indicated a number of changes to the council chairman which I considered were desirable to address the concerns of the Joint Oireachtas Committees. The council chairman undertook to convey my views to the insurance ombudsman board and to revert to me as soon as possible.
As the former insurance ombudsman pointed out to the Joint Committee, the role of the insurance ombudsman is essentially that of adjudicator, not regulator. The function of the ombudsman office is to resolve disputes between policyholders and insurance companies through mediation and, where necessary, adjudication which is binding on the insurance company involved but not on the policyholder. The ombudsman's digest of cases adjudicated, as presented in her annual report, would indicate where a policyholder's complaint of mis-selling was upheld and this would provide an important source of information to the regulatory authority. Because of the importance of this aspect, I conveyed the view to the council chairman that the insurance ombudsman should have full autonomy in regard to the content of her annual report akin to the autonomy enjoyed by the Public Service Ombudsman in making his annual report. I will await the response to my proposals for changes to the structure of the existing ombudsman scheme before giving consideration to the question of the necessity for introducing statutory provisions in relation to the existing scheme or replacing it with a statutory ombudsman scheme. Consideration of the latter measure would obviously have to have regard to whatever proposals and recommendations emerge from the implementation group established recently by the Tánaiste and the Minister for Finance to advise the Government on the establishment of a single regulatory authority for the financial services sector. However, given these developments, I believe that it would not be appropriate at this time to proceed separately to introduce statutory provisions in relation to the existing insurance ombudsman scheme.
The insurance ombudsman scheme forms an important part of the positive trend towards alternative dispute resolution procedures, for example, through voluntary methods of mediation and arbitration. I am happy to say that a partnership approach is being adopted by two of our key social partners, IBEC and ICTU, with the encouragement and support of my Department, in establishing a voluntary mediation system to resolve occupational injury compensation claims in the workplace.
