The Central Bank of Ireland also issued a general comment from Director of Enforcement, Peter Oakes:
"This is the largest fine issued by the Central Bank and 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. This enforcement action relates to consumer protection failures and the penalty imposed demonstrates that we will not tolerate breaches of this nature.
The types of failures arising in this matter not only cause detriment to a firm’s customers but also erode the special trust customers place in regulated firms, leading to significant reputational and regulatory cost, in the form of penalties and the expense of remedial action for firms.
The Consumer Protection Code (the "Code"), which was introduced by the Central Bank in 2006, sets out the standards the Central Bank expects regulated entities to comply with in their dealings with consumers.
The breaches identified in this case constitute some of the gravest and most persistent breaches of those standards that the Central Bank has come across since the introduction of the Code.
The protection of consumers in their dealings with financial entities is one of the Central Bank’s statutory objectives and is therefore a key priority. We have said previously where serious breaches of regulatory requirements designed to provide that protection occur, regulated entities can expect that those breaches will be investigated fully and followed through to conclusion.
The use of highly pressurised sales tactics will not be accepted by the Central Bank and regulated entities should ensure that all members of their sales forces are familiar with their obligations and with the regulatory requirements which apply to them.
Insurance companies can cause significant consumer detriment through mis-selling, through their remuneration arrangements and having inadequate systems and controls. The level of consumer detriment in this case arising from the firm’s non-compliance and behaviour, will not be tolerated by the Central Bank. We will continue to focus our supervisory and enforcement resources to achieve acceptable standards of compliance and consumer protection within the financial services industry, including through robust enforcement action.
My colleague, Director of Consumer Protection, Bernard Sheridan, has an important message on the revised Consumer Protection Code:
"Our recently published revised Consumer Protection Code, significantly strengthens consumer protection measures, the need for which were highlighted by this enforcement case.
Firms are reminded that from 1 January 2012, unsolicited personal visits to consumers will be banned and firms will be required to take account of any vulnerabilities that emerge in their interactions with consumers in recommending a suitable product. In addition, the revised Code reflects the Central Bank’s concerns in relation to remuneration arrangements and includes specific provisions in this regard. Regulated entities must now carefully review, and revise where necessary, all relevant aspects of their business in light of our new Code."
Finally, the Central Bank would like to acknowledge the cross-jurisdictional co-operation it received from the Financial Services Authority in the UK who have taken their own enforcement action for misconduct against an affiliated company of the firm.
If customers of the firm have particular queries in relation to their policies, they should contact the following helpline for assistance:
01 440 2781 or email the firm at
csd@ie.combined.com.