The Central Bank needs to instigate an investigation into the sale of Whole of Life insurance policies amid growing concern that a large number of consumers may have been mis-sold the policies, according to Fianna Fáil Spokesperson Finance Michael McGrath.
Whole of Life insurance policies insure a person for their whole life or for as long as they keep paying their premium. Following a review of the policy, the premium due can increase very substantially.
Deputy McGrath stated, “There have been growing concerns in recent times that many people may have been sold Whole of Life insurance policies without having the nature of the product properly explained to them. Many consumers have been shocked to find their premium increasing dramatically following a review of their policy. This could result in the policy becoming completely unaffordable and the insurance cover being lost. Some people have reported increases in their premium of a staggering 300-400% on review of their policy.
“I have raised my concerns on the issue with the Financial Services Ombudsman (FSO). Figures released to me this week by the Ombudsman show that of the 104 complaints pertaining to such policies in 2013, the Ombudsman upheld in full or in part 31 complaints. 9 complaints out of 44 decided cases in 2014 have been partly upheld by the FSO. While these figures may seem low, they need to be understood in the context that the six year rule prevents the vast majority of whole of life mis-selling cases from being brought before the FSO.
“A Central Bank investigation into the mis-selling of Payment Protection Policies has resulted in €67.4 million being refunded to 77,000 customers. It is now time for the Central Bank to investigate the area of Whole of Life insurance policies so that any consumers who were mis-sold such policies receive proper compensation from the financial institution concerned. I am also again repeating my call on the government to enact Fianna Fáil legislation to remove the six year rule which is denying justice to thousands of financial services consumers around the country.”