Insurance ombudsman `pressurised'

A major controversy has broken out over a claim that Ms Paulyn Marrinan Quinn's decision to step down as insurance ombudsman next August followed years of pressure from the insurance industry.

In an open letter to the media and senior insurance industry figures, Mr Bill McLaughlin, a member of the Insurance Ombudsman Council, claims her decision was made following "unremitting coercion" by the industry.

Mr McLaughlin announced that he was resigning from the council, the seven-member group set up to act as a buffer between the ombudsman and the board which is entirely composed of industry representatives.

In his letter, Mr McLaughlin alleged that the ombudsman has had to fend for the scheme against its creators in the insurance industry from the beginning. He said it had taken four years to overcome persistent internal resistance to house the scheme properly while Ms Marrinan Quinn has had to constantly battle for funds to be paid on time.

He accused the Irish Insurance Federation of trying to limit the ombudsman's jurisdiction when it submitted its initial terms of reference.

Mr McLaughlin also accused the council and board of collusion, claiming that they had attempted to influence the content of the ombudsman's annual reports and that they also reneged on an agreement to renew her employment contract.

In his letter, Mr McLaughlin also questioned why the industry had used its influence to oppose commission disclosure in the new regulations for the sale of life insurance, an initiative favoured by Ms Marrinan Quinn.

Democratic Left's Mr Pat Rabbitte, said Mr McLaughlin's charges must be answered in detail by the insurance industry.

He also said that Mr Noel Treacey, the Minister for Science, Technology and Commerce, must make a statement to the Dail concerning what he knows about the controversy and answer questions on the dropping of regulations for full disclosure of commission payments. Mr Rabbitte said these were at an advanced stage when he left office.

The Irish Insurance Federation (IIF) issued a statement refuting the allegations that it tried to limit the ombudsman's jurisdiction by denying her the power to investigate and decide on complaints.

The IIF's chief executive, Mr Michael Kemp, also said that the structure of the ombudsman scheme was deliberately designed to ensure independence from industry influence.

"The scope of the ombudsman's terms of reference and the structure within which she operated were generally acknowledged to compare very favourably with other ombudsman schemes and had been publicly admired by ombudsmen in other jurisdictions," the IIF said.

Mr Michael Lane, legal manager at New Ireland and chairman of the eight-member board of industry representatives, said he was "surprised and dismayed" at the allegations. But he said he was satisfied there was no basis for them and said the board would meet early next week to consider the matter.

Council chairman Mr Ernest Margetson said he had no comment to make at present but the council will also meet next week.

Ms Marrinan Quinn declined to comment on the letter's contents. But she said Mr McLaughlin's resignation from the council was a great loss as he was "an enormous resource", an international arbitrator and mediator who was very experienced in the field.

She also said she did not want policyholders whose complaints are going through her office to feel uncertain as she would continue to work as she has done all along.

"I intend to adjudicate the cases and administer the office in the way that I have always done, as openly, transparently and equitably as possible," she said. Mr Treacey indicated his continuing support for the office of the insurance ombudsman in a statement.

"I attached particular importance to the independence of the office and, in this connection, I have indicated my intention to meet with the members of the Insurance Ombudsman Council to ensure that the past good work will continue under the new ombudsman," he said.