THE Insurance Ombudsman of Ireland received 58 complaints relating to investment intermediaries last year, but could not act on them as they were outside her terms of reference.
The ombudsman, Ms Paulyn Marrinan Quinn, said she could merely advise the complainants to contact the Irish Brokers' Association (IBA) as the matters were outside her remit. However, not all brokers are IBA members.
Ms Marrinan Quinn said she could not pass on the complaints directly to the IBA as she did not have a reciprocal agreement with the association. "The best I could do was to signpost it (the IBA) to the complainant," she added. The ombudsman was speaking as controversy over the policing of investment intermediaries continued in the wake of the Taylor affair.
Meanwhile, the provisional liquidator of Taylor Asset Managers, Mr Patrick McSwiney, of BDO Simpson Xavier, will report to the High Court today on progress made since he was appointed late last week.
But the hearing is likely to be brief as Mr McSwiney is expected to merely ask the court for an extension to conduct further inquiries. He is not expected to provide a detailed explanation of the company's financial position, but may give some preliminary information.
Ms Marrinan Quinn said there was a significant increase last year in the number of cases relating to acts or omissions of insurance intermediaries. There were 58 cases last year, compared to eight cases in 1994 and 14 cases in 1992-3. In total, the ombudsman scheme, which is funded by insurance companies, received 825 written complaints, including 240 outside its terms of reference.
However, the ombudsman said that no conclusions could be drawn about the increase in complaints relating to investment intermediaries as the office - which was established four years ago - was too young. She had advised each complainant to contact the IBA, but could not say whether any had done so.
An IBA spokesman was unable to say how many complaints the association had received last year. So far this year 24 complaints had been received, including two relating to Taylor Asset Managers.
Apart from those, the complaints were of a routine nature, and those remaining to be dealt with were "in the low single figures", the spokesman added.
The Fianna Fail enterprise and employment spokeswoman, Ms Mary O'Rourke, has called for the establishment of a new statutory body to regulate investment brokers and other financial intermediaries. Ms O'Rourke described the current regulatory procedures as "woefully inadequate".
She said that one element of the service should be a director of financial affairs to deal with complaints regarding financial and investment products. The new position could operate along similar lines to the existing Director of Consumer Affairs, and there "would be some amount of interlocking between the two", Ms O'Rourke added.
The Fine Gael TD, Mr Alan Shatter, said a "radical change" was needed in the laws governing investment firms. The debacle relating to Taylor Asset Managers highlighted serious inadequacies in the Investment Intermediaries Act, according to Mr Shatter.
Statutory controls and regulations applying to the legal profession provided the precedent for the type of controls which should apply to financial intermediaries, he said.
The Fianna Fail spokesman on law reform, Mr Willie O'Dea, described the current legislation as a "toothless tiger". The law should be changed urgently "to ensure regular checks and a much more pro-active method of regulation on a constant ongoing basis," Mr O'Dea said.
