Thursday, January 24 13:13:57
The Central Bank has imposed a E65,000 fine and reprimanded insurance brokers Aon MacDonagh Boland for breaches of the Code relating to premiums control.
Three breaches were identified which occurred between the period from August 2004 to December 2011 and relate, in the main, to a failure to comply with the premium rebate and overpayment handling and systems and control requirements of the Handbook and the Code.
During the period 2 September 2004 to 6 September 2011, the Firm failed to transfer premium rebates, amounting to E25,392.63, to clients within the timeframes as specified in Requirement 2.1 and 2.2, Part V of the Handbook and Provision 32, Chapter 5 of the Code.
Between 1 July 2007 and 6 December 2011, the Firm deducted fees, totalling E105,577.55, from premium rebates due to consumers, without the prior written agreement of the consumer, the regulator said.
Between 23 August 2004 and 6 December 2011, within the Bikecare and Taxicare products, the Firm failed to ensure the repayment of E4,577.54 in premium overpayments made by clients and failed to transfer premium rebates amounting to E25,392.63, within the timelines.
It deducted fees totalling E105,577.55 from premium rebates due to customers, the regulator said.
However, the Central Bank also noted that the firm identified the issues, brought them to the attention of the Central Bank, took prompt corrective action to address and rectify the issues, introduced enhanced procedures and controls to prevent future incidences of this nature and has repaid all amounts due to affected customers.
Head of Enforcement at the Central Bank, Derville Rowland said this case represents the fifth action taken by the Central Bank against an insurance intermediary for control failures relating to the area of premium handling.
"The Central Bank places importance on the correct handling of client premiums and on the need to have adequate systems and controls in place to ensure compliance with the requirements of the Code. As we have previously said, control failures of this type represent an unacceptable risk to the Central Bank, particularly where these failures result in consumer detriment. Although this case relates to breaches of the provisions of the Handbook and the 2006 Code, it provides a timely reminder to industry to ensure that their processes and procedures, systems and controls are adequate to ensure compliance with the client premium handling requirements as set out in Chapter 3 of the Consumer Protection Code (2012)."
"The Central Bank views compliance with these requirements as being fundamental to consumer protection. Industry is reminded that the Enforcement Division works in close collaboration with the Consumer Protection Directorate within the Central Bank taking action where serious breaches of consumer protection requirements are discovered. This approach is in line with that set out in the Central Bank's Enforcement strategy and PRISM Risk Based Regulatory Framework. In the case of lower impact firms, where we do not have a close regulatory relationship under PRISM, our enforcement actions seek to deliver a clear message to industry as to what is, and what is not, acceptable behaviour, thus promoting better compliance which will ultimately benefit consumers." (By Joe O'Connor)