Insurers guarded over assessment of saving schemes

A Consumers Association (CAI) plan to assess products introduced under the Special Incentive Savings Scheme will be discussed at a general meeting of members of the Irish Insurance Federation on March 29th.

But in a warning to the IIF the CAI has said that any decision by the companies as a group to boycott the assessment system would be anti-competition and illegal. CAI finance spokesman Mr Eddie Hobbs said he would report the IIF to the Competition Authority if he found such a move was underway and the Authority could raid IIF offices for any papers on the meeting and on the kitemark plan.

IIF chairman Mr Brian Woods said there was no question of insurance companies boycotting the proposed CAI assessment plan. But he said companies had some "genuine concerns" about aspects of the scheme and how it would operate.

At the March 29th meeting, which was arranged before the kitemark plan was announced, they may decide to make some "joint representations" to the CAI and look for clarifications on the plan.

The CAI has said it will kitemark or rate the products launched by insurers and other financial institutions under the special incentive savings scheme announced in the Finance Bill. Products will be rated on costs, guarantees on product margins, flexibility and transparency and other factors. Products will get a kitemark and may be awarded from one to five stars.

Banks, building societies and insurance life offices have been asked to complete a questionaire on their products by March 30th. The assessment will be based on the questionnaire data.

Under the UK system for investments, the standards are set by the Government and companies which meet the clearly set out standards are awarded the kitemark and there is no "star" system or differentiation between companies which get a kitemark, Mr Woods explained. Because no clear criteria or benchmarks have been set out for the CAI kitemark or for the star gradings Mr Woods maintained that the CAI system would involve "a lot of subjective judgment".