The newly created Financial Services Ombudsman had very busy first year dealing with 2,600 complaints from the public with travel and health insurance of particular concern.
Financial Ombudsman Joe Meade
The Financial Ombudsman's first annual report published today shows the office headed by Joe Meade reported a 23 per cent increase in complaints over the year.
The report identifies a gap in the regulation of travel insurance. Travel agents and operators can sell insurance but these business are outside the remit of the Ombudsman and so complaints cannot be investigated. As a result, the Ombudsman strongly advocates the establishment of a code of practice similar to that already existing in the UK.
The alleged mis-selling of endowment mortgages in the late 1980s /early 90s also generated many complaints however investigations into this area may be statute barred.
The highest compensation awarded by him was €56,000 against a credit institution and €32,000 against an insurance sector provider. In general, he found in favour of 50 per cent of the complaints that were investigated while others were either settled amicably by mediation or not upheld.
The Ombudsman's primary concern about health insurance is whether the VHI contract is sufficiently clear about the dates from which policy holders are entitled to compensation.
VHI customers should be informed at the time of inception of the policy that the material date is the date of onset of the condition and not the date of diagnosis of the condition or the date of onset of the symptoms.
"Complaints would show that this information is disclosed to the insured by VHI when dealing with a claim, by which time the insured has already entered in to the insurance contract, making it difficult for him to argue against the terms of the policy," the Ombudsman said.
The Omdudsman has met with the VHI over the issue and the report says that the meetings have had a "positive outcome."
The Ombudsman also noted a number of complaints whereby policy holders were refused compensation for medical expenses despite assurances from the treating consultant.
Hospital consultants may have overstepped the mark in offering these assurances as they are not privy to the contractual details between the consumer and the insurance company.
"The Ombudsman would caution consultants in making such representations to their patients and requires that this be brought to the attention of consultants by the relevant health insurance companies," the report states.
The Financial Services Ombudsman opened for business in April 2005. As an independent officer, he ensures that unresolved complaints from customers of all regulated financial service providers are investigated, mediated and adjudicated fairly.
The Ombudsman is empowered to make awards up to €250,000 and awards are binding on both parties subject to appeal to the High Court. Eligible consumers include all natural persons, limited companies with a turnover of €3million or less (SMEs) and all unincorporated bodies, including clubs, charities, trusts, partnerships etc.