Call for bank probe into ‘churning’

The head of the Irish Insurance Federation has urged the Central Bank to investigate “churning” in the life assurance industry.

Churning is a way for brokers, insurers and banks to generate extra revenue through encouraging people to switch products. Brokers can earn money on commission and administration of changing a policyholder from one project.

In the life assurance industry, churning is used to describe the practice of encouraging consumers to cash in an existing policy before maturity and to take out a new policy instead.