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Press Release - 25 November 2008

€325,000 of specified illness cover ordered to be paid and insurance company criticised; €250,000 unsuitable geared property fund investment to be refunded; no claim bonus reduction was too harsh; €91,000 arrears in health insurance repaid; €90,000 daughter’s investment was not made on behalf of 90 year old mother; travel insurance problems and car insurance cover.

Financial Services Ombudsman, Joe Meade, today on his website

http://www.financialombudsman.ie/case-studies/

gives details of 21 significant findings made in the insurance area in the July/November 2008 period - 11 were upheld and the other 10 rejected. Findings in the banking and other credit institutions area will be published in January 2009.

Upheld

  • €325,000 specified illness cover directed to be paid and application of Insurance Company’s ‘loss of independence’ test criticised
  • €250,000 unsuitable investment in a geared property fund to be refunded
  • Fall of €13,500 in €100,000 investment after one year merits an award of €3,000
  • Reduction from 50% to 20% in no claims bonus for minor car damage caused by a 70 year old was too harsh; reduced to 5% for one year only
  • Allegation of €35,000 Investment Bond fraud against a foreign broker merits payment of €25,000 by an Irish insurance company
  • PRSA charging structure and complaint handling by Insurance Company was highly unsatisfactory- €14,000 compensation and premiums refunded
  • Sale of €20,000 assurance policy did not meet sale guidelines- €5,000 award
  • Permanent Health Insurance benefit confusion resolved and €91,000 arrears paid
  • Personal Accident Benefit definition was not clear - 50% benefit to be paid
  • Travel Insurance
    • Definition of ‘relative’ / ‘step-parent’; Ombudsman directs 75% refund of €1,100 claim
    • Cancellation of holiday due to pre-existing illness merits 50% award of Stg£1,500

Not upheld

  • Provider was entitled to alter inpatient only medical insurance cover
  • Medical Expenses Insurance and Pre-Existing Condition Waiting Period
  • Investments
    • Daughter’s €90,000 investment allegedly for 90 year old mother
    • SSIA roll over
    • Proper notification to transfer funds was not given
    • Charges applied to investment bond were correct
    • Encashment value of policy could not be based on phone value
  • Other private car insurance cover did not extend to commercial vehicles
  • Travel insurance
    • Loss of money and valuables while mugged on holidays
    • Lost baggage complaint and delayed baggage issue

Workload This year so far some 5,200 (4,050 in 2007) complaints have been received- 2,350 (1,800 in 2007) for credit institutions and 2,850 (2,250 in 2007) for the insurance sector-an overall increase of 28%.

Further information

Conor Cashman (6318575); Diarmuid Byrne (6318561); or Sylvia Costello (6318556)

Financial Services Ombudsman, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2. Lo call 1890 88 20 90; Tel: 01-6620899; Fax 01-6620890 Email mailto:enquiries@financialombudsman.ie   Website www.financialombudsman.ie

Note for media

As an independent statutory office-established on 1 April 2005-the Financial Services Ombudsman ensures that unresolved complaints from customers of financial service providers are mediated, investigated and adjudicated on in an impartial and independent manner. He can in addition to rectifying matters make compensation awards up to €250,000 which are binding on both parties subject only to appeal to the High Court.