Insurers to discuss code after report identifies breaches of data law

THE IRISH Insurance Federation is to discuss a code of practice that would allow insurers to check a customer’s claims history when they apply for insurance.

A report by the office of the Data Protection Commissioner into the use of the Insurance Link database found some insurers were in breach of data protection legislation by checking if a customer had made a previous claim before making a policy proposal.

The commissioner has ordered insurers to cease this practice.

The federation’s non-life insurance manager, Mike Horan, said the database was a fraud prevention system holding information on 2.4 million claims.

“We accept the recommendations and it does identify some deficiencies.

“The database is a very useful tool against fraud and if the appropriate safeguards could be agreed with the commissioner, we would be interested in using it at the policy proposal stage.”

The Data Commissioner’s report into Insurance Link found numerous breaches of data protection law, including that staff at insurance companies were inappropriately accessing the claims history of family, friends and of a number of celebrities and the collation of “pre-claims” data on the database.

“Pre-claims” are initial inquiries by customers who often do not proceed with a claim.

Some insurers upload these pre-claims on to Insurance Link with the result that a customer who goes on to make a legitimate claim on a separate matter may be considered to have withheld information that affects the validity of the policy.

“On the pre-claims issue, this data would have been uploaded in the expectation that a claim would be made.

“The advice from the commissioner is that we cannot take it for granted that a claim would be made and we have had meetings with our members to convey this and other issues raised in the report,” Mr Horan said.

The commissioner has ordered insurers to remove all pre-claims data from Insurance Link and also to tighten their internal controls on staff access to the database. Mr Mr Horan said this process was under way.

The report said many breaches may have arisen due to confusion among insurers around the appropriate usage of Insurance Link.

An FBD customer has provided The Irish Timeswith copies of correspondence from 2009 showing that an inquiry regarding the implications for a policy of claiming for a replacement car key was treated as a claim.

Donnchadh O’Neill, from Dublin, who was contacting the insurer on behalf of his partner, was allocated a claim refusal notice, with a claim number, although no claim was made. He said as a result of making the inquiry, his partner was now “party to a declined claim”.

In its response, FBD said the creation of a record on a customer query was standard practice across the insurance industry. A spokesman for the insurer said yesterday it could not comment on an individual case.

Mr Horan said the federation would also address a lack of public knowledge about Insurance Link and the data it holds identified in the commissioner’s report.

Insurance Link data can be accessed by insurers and also a number of self-insured agencies, including CIÉ, Eircom, ESB, Dunnes Stores, Irish Public Bodies Taskforce, An Post, Cork City Council and South Dublin County Council.