Two insurance companies have undertaken to re-examine their handling of an alleged case of so-called churning in which a Dublin gardener and his wife lost more than £20,000 almost their entire life savings.

The move by Irish Life and Friends First follows queries by The Irish Times about the case in which the couple were persuaded by a broker to put a £22,000 lump sum into an Irish Life life assurance single premium bond. But within a year the broker encouraged them to divide the money and place it with a variety of insurers, including Irish Life and Friends Provident, in smaller lump sums.

The broker then redirected the funds into annual bonds. The company expected similar lump sum premiums every year. And because of the high commission associated with setting up the individual policies paid up front to the broker in each case the lump sums were depleted from £5,000 investments to sums of well under £1,000 within a year.

The broker, who worked for a company which has since ceased trading, declined to answer questions about the case. The policy holder says the life offices involved have so far refused to accept responsibility for the broker's actions. See Story of the Week, page 5