Central Bank of Ireland (the "Central Bank")
In accordance with the its Enforcement Strategy 2011 – 2012, robust enforcement measures were taken by the Central Bank throughout 2011 against regulated entities and persons involved in the management of those regulated entities that failed to comply with regulatory requirements. The Central Bank reported a 20% increase in administrative sanctions proceedings in comparison to 2010.
In December 2011 the Central Bank imposed its largest fine to date. It fined Combined Insurance Company of Europe Limited €3,350,000.00 arising from 'grave and persistent' breaches of the Consumer Protection Code. The Director of Enforcement of the Central Bank, Peter Oakes, commented that this fine "reflects the seriousness with which we view fundamental regulatory failures including inadequate systems and controls which cause large scale non-compliance with our regulatory requirements".
The Central Bank has indicated a strong intention to continue to focus its supervisory and enforcement resources to achieve acceptable standards of compliance and consumer protection within the financial services industry and, therefore, we expect to see further activity in this area in 2012.
Financial Services Ombudsman (the "FSO")
Bi-annual Review
The FSO recently published his office's bi-annual review which analyses all complaints received and findings made by the FSO in the first six months of 2011. Its results show an overall increase in the number of complaints received and the percentage of findings upheld against financial service providers has also increased. 48% of all complaints were specific to the insurance sector, 18% of which related to household building insurance, 17% to motor insurance and 13% to life assurance. Over 75% of these complaints, however, were not upheld by the FSO.
Publication of Complaints Records
William Prasifka, the FSO, has received a number of submissions regarding his recent proposal to publish the complaints records of individual financial services providers in future annual reports.
Submissions have been made by a range of bodies throughout the industry, including the Professional Insurance Brokers Association ("PIBA"), Irish Banking Federation, the Irish Insurance Federation ("IIF"), the Central Bank, together with submissions from various financial institutions and consumers. The submissions generally support the proposal, however a number of concerns have been raised surrounding its implementation.
PIBA have suggested that ten (10) upheld/partially upheld findings should be set as the threshold to be met before a financial service provider's complaints records are published, and opposes the FSO's proposal that financial service providers should be identified in case reports. PIBA further suggested that an application fee be imposed to prevent 'have-a-go' complaints.
The IIF had a number of concerns about the proposal namely that it creates the potential for generating misunderstanding in the market, it may subvert the statutory/supervisory role of the Central Bank through periodic trial by media and could deny insurers the right to due process under existing legislation and regulations.
It is as yet unclear how the FSO will address these concerns. All of the submissions have been published on the FSO's website (http://www.financialombudsman.ie/)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.