Unclaimed life insurance funds could be worth an estimated €45 million, under new dormant accounts legislation introduced in the Dáil yesterday.
The Green Party described the Unclaimed Life Assurance Policies Bill as a "Robin Hood" measure but opposition deputies also expressed concern that the Government would use the money from dormant policies as a "slush fund".
The Minister of State for Enterprise, Mr Frank Fahey, rejected the slush fund claims and said an independent board would be established to distribute the surplus money. The legislation mirrors that put in place for dormant bank and post office accounts.
Under the Bill, money from unclaimed life insurance funds will go to a dormant accounts fund to be managed by the National Treasury Management Agency. Funds unlikely to be claimed will then be spent "for charitable purposes or purposes of societal and community benefit", according to the Minister for Finance, Mr McCreevy, who introduced the Bill.
He said the legislation was essentially a "consumer protection measure and that the rightful owner would have a "guaranteed right to reclaim funds at any time".
Policies would be deemed dormant where there had been no communication from the customer for 15 years in the case of policies with an unspecified term policy and five years for policies with a specific term
The Minister recognised as a matter of "public conjecture and concern" the failure of financial institutions to trace the owners of these funds. They would be obliged to personally contact anyone whose policy was worth more than €500 and to place annual adverts in two or more national papers.
Mr Dan Boyle (Green, Cork South Central) said the Bill was "Robin Hood" legislation but he was concerned that the Government would use the assets "as part of its expenditure programmes even though the State has not acquired them through traditional and logical means".
Mr McCreevy told Mr Paul McGrath (FG, Westmeath) that he would not know until next March or April how much money emerged from dormant bank or post office accounts. It was impossible to estimate the amount of the dormant insurance policy fund because of the complexity in measuring the encashment value.
However, Mr Paudge Connolly (Ind, Cavan-Monaghan) said a "conservative estimate" of the amount of unclaimed policies was about €45 million. While he supported the Bill, he questioned the State's power to "requisition or seize the encashment values" of policies and use them for charitable purposes.
