The Coalition Government should give serious consideration to appointing an Ombudsman to the Insurance Industry on a statutory basis following the disclosures made yesterday by the incumbent of that office, Ms Paulyn Marrinan Quinn. Six years ago, in response to a growing chorus of consumer complaints, the industry offered to police its own members and practices through the appointment of an Ombudsman on a non-statutory basis. This approach was accepted by the Government on condition that the limited terms of reference proposed by the industry should be expanded to provide greater discretion for the Ombudsman in the determination of issues in dispute between policy holders and insurers. Even then, the remit of the Ombudsman was rigidly circumscribed. She could not investigate or arbitrate on complaints against insurance brokers in relation to the mis-selling of policies or their values. In spite of these limitations and the failure of some insurance companies to distribute information on the role of the Ombudsman to their customers, significant progress was made.
But the initial reluctance by some elements to provide for an independent consumer complaints champion grew into active resistance . Last February, Mr Bill McLaughlin of the Insurance Ombudsman Council stated publicly that Ms Marrinan Quinn was leaving the position as Ombudsman following "unremitting coercion" by the industry. He accused the Council and the Insurance Board of collusion, claiming they had attempted to influence the content of the ombudsman's annual reports and had reneged on an agreement to renew her employment contract. Ms Marrinan Quinn declined to comment on the controversy at the time, but the circumstances should have set alarm bells ringing in Government. Nothing happened. The industry, rather than the interests of the consumer, appeared to be driving the political agenda.
It took a series of statements by former Minister of State, Mr Pat Rabbitte, to bring the issue to the floor of the Dail. Even there , the pretence that nothing was amiss was maintained. Minister of State, Mr Noel Treacy, paid tribute to Ms Marrinan Quinn for her efficiency and effectiveness in defence of the consumer. And he presented as "proof" that the Office would "continue to prosper", the fact that advertisements had been placed to find a successor. That kind of wilfully-blinkered political response generated anger and frustration amongst consumers. It also caused Ms Marrinan Quinn to state her concerns in public. She confirmed the veracity of complaints made by Mr McLaughlin and Mr Rabbitte and said her Office had been continually underfunded, interfered with and obstructed by the Council and the Board of the insurance industry. She called for the implementation of international best practices in relation to the Office and indicated a willingness to stay on in changed circumstances.
Those statements of underfunding and interference were trenchantly denied yesterday by the chairman of the Irish Insurance Federation, Mr Michael Kemp. And a spokesman for the industry indicated that the recruitment of a successor was at an advanced stage. Last night, Mr Treacy sought political cover by asserting that he had been assured by members of the Ombudsman's Council that all was well. In the circumstances, it was a weak and unconvincing response. The Minister, as representative of the consumer and public interests, has a responsibility to ensure full transparency and accountability by the industry. He should address the issue as a matter of urgency in that light.