Insurance firms ‘don’t fully comply’

NO insurance firms are fully complying with the consumer protection code, according to findings from the Central Bank.

The inspection focused specifically on the area of complaints handling processes in insurance firms and found that, across 12 companies, none of the firms were fully compliant with all requirements of the code.

The inspection actually found that a number of firms had “a particularly low level of compliance in relation to complaints handling, while less serious breaches were found in others”.

None of the insurance firms have been named by the Central Bank; however, the firms inspected represent over 60% of the life assurance sector here, by sales volume, and 35% of the non-life insurance sector.

Among the areas of concern highlighted were the lack of acknowledgement in writing, by companies, of complaints within the required timeframe of five business days following receipt of complaint; firms failing to inform consumers of their right to refer matters to the office of the Financial Services Ombudsman (FSO); and instances of consumers not being provided with details of an individual point of contact until the complaint was either resolved or couldn’t be processed any further.

“The consumer protection code requires that a firm’s complaints resolution process is fair and effective and the findings of this inspection are of particular concern, considering the prescriptive nature of the rules contained within the code. The Central Bank expects full compliance with all aspects of the code,” director of consumer protection at the Central Bank Bernard Sheridan said.

The Consumers’ Association of Ireland (CAI) said the findings highlight that not enough resources are being put into resolving customers’ complaints.

The body said it will bring the matter to the attention of the FSO and the Irish Insurance Federation.

CAI chief executive and chair of the FSODermott Jewell said that since the concerns deal with such basic levels of breaches, “alarm bells should be ringing”. He said consumer service “requires a better level of attention” and that if firms don’t comply fully, “we have a problem”.