Posted by Jill Kerby on May 31 2009 @ 21:41
The Sunday Times
MoneyQs – May 31
By Jill Kerby
KS writes from Dublin: I had a Quinn Life SSIA and when this finished I continued to put money into a new product to keep up the saving habit. I took some money out and at present have around €15,000 in the fund. My question is, how safe is my money? Is it protected by the banking scheme?
There is no equivalent to the bank deposit guarantee scheme for life insurance companies regulated by the Irish Financial Services Authority. Only two life insurers that operate here, Standard Life and Caledonian Life, would pay out compensation to their investment or protection policy holders if their companies became insolvent. This is because they operate here under the regulation of the UK Financial Services Authority (FSA) and participate in the UK Financial Services Compensation Scheme. The scheme provides consumers of UK regulated life policies 100% of the first €2,000 and 90% of the remainder of the claim. As for whether Quinn Life – which is licensed and regulated by the Financial Regulator is ‘safe’, the company replied last September to the same question from a customer who then posted the reply on the popular financial website, askaboutmoney.com on October 2, 2008. The company stated: “QUINN-life must adhere to certain rules on solvency as defined by EU Life Directive's and Irish legislation. The company must report statistical and financial information to the Regulator on a quarterly basis and is subject to random supervisory visits by the Regulator… Quinn Life has a very simple balance sheet in that the company is carrying no debt, no derivative type assets and the company has no guaranteed type products that depend on derivative transactions with other companies. In addition, Quinn Life is a ring fenced regulated company, meaning that the company's assets or retained profits cannot be drawn down or transferred to any other Quinn Group company without prior Regulator approval.” However just three weeks later it was revealed that the owner of Quinn Life, Sean Quinn, was personally fined €200,000 and Quinn Insurance, the non-life company within his group was fined €3.5 million for not informing the Regulator of a loan of €288 million from Quinn Insurance to the Quinn Group that was used by the Quinn family to cover falling stock market investments and finance share-buying in Anglo Irish Bank. Mr Quinn accepted full responsibility for the breach of the regulation.
NO’C writes from Wicklow: Seven years ago I paid off the mortgage on my house that I had with Bank of Ireland. They sent me a statement showing a €0 balance which was accompanied by a congratulatory card! However, the bank has held on to the house deeds and as I would now like to have them in my possession, I wonder what steps I need to take and will there be a charge? Incidentally I am one of their "highly valued" Golden Years account holders and a pensioner.
You shouldn’t have any difficulty getting your deed back from your lender, I am told, hopefully without any cost though this could depend on the institution. It is your property after all. But you do want to keep it safe and that’s where you might hit a snag: the Irish banks no longer offer safe deposit facilities, but your solicitor may. (My solicitor has our house deed, for example.) There may be a small annual fee to pay. Home safes are becoming more popular; check out a good hardware, locksmith or security company for an appropriate model. I know someone who had a below floor one installed in their house where they keep all their deeds, financial policies, passports and birth certificates and a few pieces of valuable jewellery. After a spate of break-ins in his neighbourhood in which only car keys were being stolen from the hall table he now drops the keys to his Merc in the safe every night as well.
MD writes from Dublin: I heard you speak last year at the Over 50s Show and came away relieved that my finances were okay. Recently, several of my savings certificates, building society fixed term accounts, etc have matured and I am at a loss about how to proceed. I am 75 years old, own my own house and while my savings is not a fortune – about €100,000 and a few more saving certs to mature in the next couple of years - I want to secure what I have. I would like to be able to help my family afford a few luxuries like holidays and help with the cost of the education of my two grandchildren as well.
Your desire to help your family is laudable, but I hope you are doing so only after you secure your own finances for both the short and long term, say in the event that you need either in-home or institutional care. With interest rates so low, market volatility and falling house prices you need to err on the side of caution. and there being so much volatility in both the banking and investment markets you need to be extra cautious; I expect your family will appreciate this too. I suggest that you speak to a good, fee based advisor to help you both secure your cash fund and generate a safe annual return which you can use both to boost you regular income and help your family. A capital guaranteed bond, perhaps inflation linked, might be worth considering in addition to a selection of safe deposit accounts. Perhaps your family can help you find such a trusted advisor with the help of the Financial Regulator (Locall 1890 777777) who keeps a register of those that they regulate.