Tuesday 22 October 2019

Disgraced insurer must pay back over €2m to customers

Laura Noonan

THOUSANDS of people who bought policies from Combined Insurance are set to share in refunds of more than €2m after the disgraced insurer was caught deliberately mis-selling policies, contacting customers who'd asked them to desist and misusing bank account details.

The Central Bank ordered the insurer to refund as much as €2.15m to policyholders and imposed a further fine of €3.35m on Combined after uncovering an unprecedented 28 breaches of "governance and selling" regulations.

The staggering catalogue of breaches occurred between 2006 and 2011 when Combined had about 500,000 policies in force.

The insurer specialises in door-to-door selling of accident, illness and other specialist insurance policies, often in disadvantaged areas.

Some 646 policyholders who were over-insured have already shared in refunds of €130,000. Another 3,239 policyholders who were affected by untoward practices between August 1, 2006, and September 30, 2009, have gotten back almost €565,000.

Combined has also offered refunds on all policies sold between September 2010 and April 2011, when the niche insurer stopped selling new business.


Combined, which is owned by US insurance giant ACE, yesterday stressed that it was "strong financially and committed to serving all its existing policyholders".

Anyone with queries about their policy should contact csd@ie.combined.com or 01 4402781.

Yesterday's announcement follows a year-and-a-half long investigation by the Central Bank, as first revealed by the Irish Independent in July 2010.

Since the probe started, Combined has severed links with the 200-plus 'tied agent' sellers it once had on its books. Staff numbers at the insurer's head office have plummeted from 65 to 15, including the insurer's new management team.

A spokeswoman for the company last night declined to say whether it intended to sell new business in the future, saying only that it was not on the cards "for the time being".

The Irish Independent understands that Combined has not had its licence revoked, but the insurer would have to have its sales model approved by Financial Regulator Mathew Elderfield before it could take on new customers.

The litany of breaches detected by the Central Bank included instances where agents:

- Wrongly obtained customers' bank details and used them to set up policies in other people's names

- Collected premiums from customers and failed to set up the new policies that the premiums were intended to pay for.

- Used existing customers' bank account details to set up additional policies for those individuals without their knowledge or permission.

- "Recklessly, negligently and deliberately misled" customers on the advantages of Combined's products.

- Exerted "undue pressure on customers" to buy products.

- Over-insured customers.

- Contacted customers early in the morning or late at night, breaching the "permitted hours" imposed by the Central Bank.

- Failed to identify themselves as working for Combined.

- Failed to "abide by requests" from consumers not to "make unsolicited contact" with them again.

Combined was also slammed for failing to "properly adjudicate" claims and not following the Central Bank's procedures for dealing with complaints.

The firm was also criticised for "failing to investigate 'red flags' raised about its selling practices and for creating a "high-pressure sales environment" by heavily incentivising the pay of both tied agents and supervisors towards sales targets.

The Central Bank stressed that the firm has "made significant efforts to improve its processes" since 2010 and noted the "co-operation" of Combined's new board.

Irish Independent

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