Whole-of-life assurance policies
Senator Ned O’Sullivan asks the Leader to pursue concerns about reviews and forfeited payments under whole-of-life assurance policies; the Leader agrees the issue may require action if the Ombudsman cannot resolve it.
This is my first time to be in this privileged position for eight years. I assure the Leader that we on this side of the House will not be opposing the Order of Business today. However, I wish to mention a few things, although I do not wish to be controversial as I am not in the form for it.
When I raised a matter in the House last week, the Leader advised me to table a Commencement Matter. I was going to do so, but now that I have my chance I will raise the matter again. It concerns whole-of-life assurance policies. The amount of mail I have received since I raised the matter last week is incredible. My Fianna Fáil colleague, Deputy Michael McGrath, has previously raised it in the Dáil and I understand he has also been inundated with mail, most of it from people in their sixties and beyond. It concerns covering one's spouse and family following one's death. Many people took out such policies 20 years ago and invested, on average, €100 per month in the expectation that, following their death, their spouse would receive something in the order of €200,000. This provided great comfort for many and their families, but what would happen was never explained to those who took out such policies. After ten years the companies involved are entitled to review the position and can change the premium payable at will. The customer has no say in the matter. After a further ten years the companies involved can do it again and again after a further five years and again after a further five years. If a person is lucky enough to reach the age of 70 years, it appears the companies involved can do so annually. I have a client who started off by paying €100 per month for cover worth €200,000. Twenty years later he is covered for the same amount, for which he is paying €850 per month. He is trapped and has already invested about €50,000. These policies have no surrender value and there is no investment aspect to them. Most people have stopped paying for them, but the money goes straight into the hands of the company involved.
Comment on this
It is one on which I have received a lot of mail and I must tell the truth. The Minister for Finance, Deputy Michael Noonan, is quite sympathetic, if one sees his response to Deputy Michael McGrath. He believes, however, that the hands of the Financial Ombudsman are tied on the issue, but I am not so sure. Given his stature, will the Leader bring this matter directly to the attention of the Minister?