Non-existent Insurance policies, broker closed (fraud)

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Plek Trum

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Hi all,

I live in a small rural town. Local insurance brokers closed suddenly and without notice last week. Received notification this morning that the 'office' has merged with another insurance brokers in the county.

Several people in town have since been informed that the broker in town had been issuing policies to people that infact did not exist, the money was pocketed directly (covered by "a delay in getting the policy documents" and other such excuses).

I took out 2 insurance policies (home and business) with this broker (run by one person) and other additional policies (add ons for jewellery with home insurance etc). I have been told directly from an employee in the new office that fraudulent dealings did happen and basically if I did not receive policy documents (to my shame I did not, and did not follow up) then I basically have no follow up. These commenced August 2009.

Surely this cannot be correct.
I have paid for cover for almost 6 months and within that period had no coverage. I am furious that this happened, especially concerning my publi liability cover for my business.

Is there a governing body of Insurance companies in Ireland?
Can anyone advise on the legal situtation in such a case?
 
Re: Non-existant Insurance policies, broker closed (fraud)

All insurance brokers have to be regulated by the Financial Regulator.

You could check with them if there is compensation fund for general insurance brokers. I don't think that there is.

If it's any consolation, you are relatively lucky in that you have lost, only the premium. People who have a substantial claim against them who have no insurance will be in a much worse position.

Brendan
 
Re: Non-existant Insurance policies, broker closed (fraud)

I wonder how your insurance status stands now though? you've not had insurance for 6 months, will it be seen as a break in cover ? And will this effect your new insurance?
 
Re: Non-existant Insurance policies, broker closed (fraud)

Thanks Brendan - yes I know. I suppose its the initial fright when I think of the 'what if ' scenario's, whatever about my home insurance but most definately with the public liability policy.

Rather disappointed also that I allowed myself get talked into several additional 'add on's' that I didn't intend on but was convinced by the sell that they were well worth it. Lesson learned - so much for supporting local businesses (which was my only reason for going with them) , will be going direct in future!
 
Re: Non-existant Insurance policies, broker closed (fraud)

Valid point Woodbine - I am not sure but will add that to my list of questions. Will contact the new company that sent the letter this morning but at the moment they aren't answering any queries realting to individual policies from the closed brokers.

On a related note, surely this is fraud? Would the broker face criminal charges?
 
Re: Non-existant Insurance policies, broker closed (fraud)

Firstly I suggest you go and make contact with the new company, if they are not answering any queries re the closed brokers, go up to their office and ask to speak to someone face to face. Depending on how that goes, if you still believe you've been defrauded, then go up to the Garda Station and make a complaint
 
In accordance with legislation the 'Broker' is legally obliged to issue you with a receipt at the time cover was arranged which must set out the details of the cover provided, the date of the cover and most importantly the name of the insurer with with whom the cover has been placed. If you have such a receipt you can take it along to the insurance company who will be obliged to stand by the cover. Assuming broker was registered of course !!
 
Thanks Willowcase - I have the receipt so thats a good start point. We'll see - due to contact the new office at 11:00 today. Hopefully something amicable will be arranged.
 
Did you receive policy documents showing cover?

If there's no policy in affect, make a complaint to the Gardai who will investigate this possible fraud.

You should also contact the financial regulator for advice. The insurance ombudsman is another avenue.
 
You should try to find out how many other people are affected and the total sum involved. A group will be stronger with any possible proceedings that may be taken.
 
Quick update - finally after much persistance on our part, the new insurance brokers and agreed to initiate a new policy for me from today for the next 12 months, free of charge, and will refund me any difference from the amount I paid initally to a new quote. Very fair and I am happy with that.

On another note, there are at least 3 people I know of who has various claims (house damage, water damage) etc during the cold spell. All three insured with them, two of whom have been iformed that NO policy exists. One family stuck with a bill for over 7k for repairs. Thankfull I got away lightly, there are many more in a worse position.

Is there any avenue open to these people? e.g can they sue the person who ran the original brokers, took their money and did not follow through on processing their policies, directly?
 
I hope you've still reported this to the fraud squad. Whether you've been compensated or not, the broker still broke the law and other people need to be protected against them.
 
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