Sir, The Business Opinion column of June 9th dealt with the recent publication of the Insurance Ombudsman's annual report. While the article accurately summarised the report's findings, I must take issue with some of the conclusions drawn by the columnist, Jill Kerby.
Ms Kerby's main contention, that the insurance industry some how sought to limit the scope of the Ombudsman's powers in order to avoid dealing with contentious issues, is completely unfounded.
The Ombudsman scheme was a voluntary one established by insurance companies in 1992 to provide a demonstrably independent procedure for considering the complaints of customers. In doing so, insurance companies agreed to be bound by the Ombudsman's decisions and interpretations of the terms of the contract between the insurance company and the customer.
The scheme has worked extremely well in providing an additional avenue of redress to those already established for policyholders, for example the IIF's own Insurance Information Service, which provides a free complaints and advice service to all policy holders and the Insurance Section of the industry regulator, the Department of Enterprise and Employment, which also has a complaints handling function.
Thus, far from having "no independent form of complaint or regulation", the insurance industry now provides a variety of options for customers, and is of course itself closely regulated by a Government Department.
Given that membership of the Insurance Ombudsman Scheme is voluntary, neither the Ombudsman, her board and council, nor the IIF has any power to impose membership on anyone else, including insurance intermediaries.
The terms of reference of the scheme and the legal requirements on insurers require companies to take responsibility for the acts of their employees (including direct sales forces) and of their tied agents. For the very reason that insurance brokers act as in dependent intermediaries in advising clients, insurers cannot unilaterally extend the terms of the Ombudsman Scheme to include jurisdiction to deal with complaints against those intermediaries.
While insurers would certainly not seek to block the establishment of an Ombudsman Scheme for insurance intermediaries, it is not up to insurers to set up such a scheme, but a matter solely for those intermediaries themselves. Insurers can only take responsibility for problems which arise from their role as product designers and providers, and for the acts and omissions of those people they employ directly to sell those products to the public.
I should add that the Irish Insurance Ombudsman Scheme is no different in its scope from many other similar schemes, including the British Insurance Ombudsman Bureau. The terms of reference of the Irish Insurance Ombudsman as they stand are quite wide, and comparable to those of the UK scheme and the Irish Credit Institutions Ombudsman, which both served as models in the design of the Irish insurance scheme. - Yours, etc.,
Irish Insurance Federation, Molesworth Street,
Dublin 2.