Life When you lose confidence in the integrity of an Insurance Company

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Gulliver

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What do you do when you have lost confidence in the data provided by an insurance company, are unsure if they are wrong, and cannot formulate a formal complaint without comprehensive data which they hold

Briefly, I am executor for a case in which the deceased (my brother) had a number of policies with insurance companies.

As executor, I provided policy numbers to XYZ insurance co (one of the major insurance companies in the market) and requested a search for any other policies of the deceased. The list provided was submitted among the list of assets for probate, but was subsequently proven to have omitted one significant policy.

It also emerged that the company had held on to funds from a policy for almost 2 years after maturity, because the deceased had given no written direction on re-investment. By my reckoning, these funds should have been returned to the policyholder promptly during his lifetime.

Now, last week, when probate has been granted, and I claimed the proceeds, I was paid €9,000 short. When I pressed for investigation, they pleaded a "system error" and provided the funds.

On each situation, I have received apologies, but I have totally lost confidence in the integrity of the company. I don't know if they are holding back more. I cannot make a formal complaint to the ombudsman, since I don't know for sure if there is still a problem.

What to do??? After the first 2 problems, I asked for an investigation by their external auditor, but this was not forthcoming.
 
Your first mistake was to have confidence in an insurance company to begin with. They are notorious for weaseling there way out of paying claims of any sort.

Ask them to send you a full statement of the accounts showing all premiums and bonuses. If it is jargon, get someone with experience in the type of policy to check them out.

If you still smell a rat with the policies, and you feel they are not unduly jumping at the chance to investigate potentially serious internal issues, you could write to the ombudsman.
 
presumably the insurance company wrote to policyholder asking what to do with the funds. If he did not reply, what are they supposed to do?

'System Error' does not really make sense. You need to have this clarified. Could it be that they were valuing the policy at both date of death and date of payment? Could they simply have made a mistake with the dates, which is now resolved?
 
Your experience is not unique to yourself and is not confined to Insurance companies but also banks and building societies too.

Some of the problems arise when old accounts are converted onto new systems and have different account or policy numbers.

Also the spelling of the accounts/ policies are critical. Institutions have different systems and different levels of experience among staff who are checking the data.

If you request info on Tom O'Neill with a dob of 01/01/1970, it is possible that Thomas O'Neill with the same date of birth will not show up in their searches. Also Tom O Neill and Tom ONeill might not work either.

Some building societies do searches by addresses also.

It would be good advice for everyone to have a summary of all stocks, bank accounts, life policies etc on a sheet of paper with narrative to make an executor's job easier.
 
Hi Gulliver

A difficult one.

A few ideas.

What level are you dealing with? Can you find a more senior contact in the company who might investigate it/

There should be a compliance manager who would be interested in the fact that two mistakes have already been made. She should use these to check the systems, especially as they have been deemed "system" errors.

I don't suppose the public has access to the dormant accounts section? Is there a dormant accounts manager who might look into it for you?

Finally, if you get nowhere, you should report it to the Central Bank. They don't pursue individual complaints and you should specify that you are not making an individual complaint, but as the company has reported a system error, others may be affected by it.

I don't think that it is the role of the external auditors.

I presume that you have gone back through bank statements over the years to see what payments he made to which companies? In most cases, though, you will probably only see cheque numbers and unless you ask the bank for copies of the cheques, you will have no idea to whom they were paid.

Did he use a broker?

Brendan
 
Your story does not surprise me at all. I have a relation who took a couple of years to fight an insurance company and the result after an awful lot of sweat and tears was that all incurance companies in Ireland changed their way of doing business in relation to a certain area (don't want too specify exactly what as it would identy the person and it was high profile at the time) So best of luck with your battle and please do make the complaint.

'System errors' is the great get out clause of our time and should not be tolerated when it is statistically always in favour of insurance companies/banks ets. There are of course genuine system errors.
 
Thank you all for helpful comments.

Ravima..... When a policy has matured, and the policyholder has not given directions for re-investment, I would consider that there is an obligation to return the funds to the policyholder. What they actually did was to hold it in a suspense account for 2 years. Surely that is wrong? In a suspense account, the funds are not covered by any form of guarantee; nor do they attract interest in the normal course. After strong persuasion by me, they have eventually conceded and paid interest at a low rate.

PJ111.... You raise a very important point - that everyone should maintain a lit of assets updated each year, and let the executor know where such list is held. Fortunately, when my brother asked me to be his executor, I made it a condition that he should have such a list. It was a saviour in this complex case.

PJ111.... There is no possibility that a confusion about name would have arisen. My bother had one of those short names which is never abbreviated, and there is little likelihood that the surname would be confused - there is no O' or Mac prefix.

Brendan... I have previously asked that their response should be referred to senior management and signed off there, but this has not been done. I will now write directly to the CEO, and perhaps copy to the compliance manager. Depending n the response, I will consider copying to the CB

Gull
 
Of course there is an obligation to repay funds to Policyholder. the point I was trying to make is that perhaps they TRIED to contact Policyholder, but if he did not reply to the correspondence, what are they to do? They need instructions from HIM as to what to do with HIS money. If insurance company invested it in some fund and it lost value, would Policyholder not have a justifiable complaint? Over the past few years 'cash' funds, supposed to be teh 'safest', have not increased much in value.

as Brendan also suggests, and it is a brilliant point, 'system error' will be investigated by Central Bank. If there is a possibility that others might also be affected, the consequences could be serious for the insurer in terms of fines.

The insurers get bad press, sometimes justified, but they are not always 100% at fault.
 
Ravima said:
Of course there is an obligation to repay funds to Policyholder. the point I was trying to make is that perhaps they TRIED to contact Policyholder, but if he did not reply to the correspondence, what are they to do? They need instructions from HIM as to what to do with HIS money. If insurance company invested it in some fund and it lost value, would Policyholder not have a justifiable complaint? Over the past few years 'cash' funds, supposed to be teh 'safest', have not increased much in value.
Click to expand...

In this case, they wrote to the insured and he did not respond to that specific point, but they knew he was alive and living at is premises. When a policy had expired, they had no mandate to re-invest it or to hold on to it. They should have returned it to him by cheque.
In fact, they held it in a suspense account and appear to have forgoten it. My guess is that somebody did a review of the contents of the suspense account about 2 years later - that is when the issue came to light. It cannot be right to hold on to funds in a suspense account for such a protracted period!!
 
Isn't that convenient, that after a policy comes to an end, without direction from the investor the insurance company can put it into an account, called a suspense account, with zero interest. What about a rule that when a policy ends a cheque is sent forthwith to the policy holder.

I suppose suspense accounts make money for insurance companies despite being non interest bearing. Wonder how that works. And wonder how much money in these suspense accounts never get claimed.
 
Well they wrote to him. He did not respond. Perhaps he had reasons. Perhaps he was considering the matter and forgot about it. How did the company know he was living at that address? Some people do in fact leave money in suspense for quite a while. It can happen if they are trying to hide it from spouse/ family/creditors. Once all is 'sorted' in their minds, they then collect.

I'm not suggesting for a moment that that was the intention here, but we are all uniquely different when it comes to money.

Some ministers for finance had money in biscuit tins with no bank accounts to lodge the cash into, so it was sometimes converted to dollars, sometimes to sterling and sometimes won and lose in bookies shops.
 
Insurance companies, banks & building societies have and had different ways of going about their business, procedure wise.

When a policy matures, some will write out to the last known advised address between 1-3 times. If there is no reply or correspondence is sent back some might endeavour to cross reference against other policies to try to obtain new address. Others might not. Some might engage the services of Asset Reunification compnaies that try to track down lost policy or shareholders to match entitlements in return for a finders fee.

Again different institutions have rules in relation to suspense accounts that can pay nil to small levels of interest and whilst companies can make on this, not all all do it intentionally as the money is after all on demand.

I don't know the full circumstances in your situation where the reinvestment may not have occured because of no instruction or maturity form received - that seems reasonable.

I would say though it was down to human error - I know that's not good enough.

I am aware of so many instances of companies not being able to find policies or accounts because the computer "says no". Young, lazy, inexperienced staff who don't or won't go the extra mile to try to find that extra policy number or account number that is on a different "old system" is a common reason.

A friend of mine who is a broker, is a serial executor for clients eventhough he is not a solicitor and he ensures that all his clients have these statements of affairs (updated every year) to include location of will, shares, bank account numbers etc, names of other advisors including other brokers, accountants, solicitors.

The first port of call is to lodge an official complaint with the company which will mean your complaint will have to be investigated. The word complaint is important so it is treated as such.

Good luck with your efforts.
 
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