THE DEPARTURE OF Ulster Bank and KBC Bank could have implications for insurance and pension policies if they are set up to pay by direct debit, Insurance Ireland has warned.
Customers of the two banks should act now and provide updated direct debit mandates for their insurance policies in order to ensure that benefits are not interrupted or lapse, according to the representative group.
Ulster Bank has said it will begin freezing and closing accounts on Friday.
CEO of Insurance Ireland, Moyagh Murdock, said: “In order to ensure that policies continue uninterrupted, Ulster Bank and KBC customers need to act as a matter of urgency and update direct debit mandates for all their insurance products to their new bank account.”
“If a policy lapses, customers are at risk of losing cover, so it is important to act now so you don’t miss out. It may not be possible to reinstate a lapsed policy with the same terms and conditions. It may have to be treated as a new policy, which means consumers risk losing benefits built up over time.
Murdock said that there are many potential impacts of lapsed policies, such as the legal ramifications of not having motor insurance or getting into a collision when uninsured.
Lapsed home insurance could have major financial implications in the event of a fire or storm.
“If your health policy lapses, there is a risk you could lose cover for pre-existing conditions and have to re-serve waiting periods. You could also be liable to additional Lifetime Community Rating loading charges, which can be quite significant if you fail to take out health insurance 13 weeks after the policy is cancelled,” she continued.
“In terms of life insurance, these policies are dependent on health at the time of underwriting. As you get older your risk increases, so if you need to take out a new policy as a result of unpaid premiums, it could be more expensive.”
Insurance and pensions customers who have not yet switched to a new provider can visit the Competition and Consumer Protection Commission’s website, which has published detailed information on how to complete the process.
Insurance Ireland also recommends that customers visit their insurance or pension provider’s website and make contact with them as soon as possible for urgent advice on the changeover to a new bank account.
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