Our members are not thieving, say brokers
Insurance probe shows a number are guilty of over-charging
BODIES that represent insurance brokers have denied their members are engaged in theft after a probe by the Financial Regulator found a number of brokers were guilty of overcharging while others were failing to pay refunds.
An inspection of a sample of the country's 2,500 brokers also found some of them were selling consumers optional extra products the clients had not said they wanted.
The Regulator has now written to all insurance brokers warning them that "serious issues were noted" in some brokerages following an inspections process.
The State watchdog has the power to impose fines of up to €5m on firms found to be in breach of regulations without having to go to the courts. Individuals can be fined up to €500,000 and barred from operating in the industry.
A spokeswoman for the Regulator could not say how many firms were found to be overcharging or failing to give consumers full rebates that they are due on insurance policies.
But she stressed that most brokerage firms were complying with the regulations.
However, the Regulator was concerned that an unspecified number were failing to disclose all fees and charges and were overcharging.
Brian McNelis of the Irish Brokers' Association (IBA) insisted only a small number of brokers were guilty of overcharging.
Asked if overcharging was not effectively theft from consumers, Mr McNelis said: "We do not condone it, if it is happening with any broker."
The majority of brokers were complying with the regulations, but he admitted that it was clear a small number had been found wanting.
Failing to fully disclose fees and charges, overcharging, and selling consumers optional extras (like personal accident cover) which they have not asked for, are all activities banned under the Consumer Protection Code.
The Professional Insurance Brokers Association (PIBA) said it supports the Consumer Protection Code in its entirety and would like to see it extended fully to all financial institutions, including the banks.
PIBA said it spends a lot of time assisting its 900 member firms with specific and detailed guidelines on how they can ensure they comply with the code and with all other consumer protection legislation.
"We note the Regulator has confirmed that compliance levels were good in the majority of firms inspected and we welcome this," said Diarmuid Kelly CEO of PIBA.
"We do not condone practices that do not comply with the Consumer Protection Code. That said, the practices referred to relate to non-life retail insurance, which perhaps should be regulated under different structures.
"In fairness, the Regulator should, at a minimum, publish the number of cases it found to be non compliant.
"Otherwise, honest brokers may be unfairly tainted with the bad and unacceptable practices of what clearly, on the basis of the Regulator's statement, appears to be a few."