asked the Minister for Trade, Commerce and Tourism the proposals he has for rationalising the motor insurance business in this country; and if he will take steps to eliminate the discrimination against motorcar drivers under 21 years of age.
Ceisteanna—Questions. Oral Answers. - Motor Insurance Rationalisation.
41.
I am not clear what the Deputy means by "rationalising the motor insurance business in this country", but assume that the expression relates primarily to premium rates for different categories.
As regards the discrimination referred to, I take it that what he has in mind is premium costs, rather than availability of cover which seems to be no longer a problem. It has long been the practice of motor insurance companies to apply loadings in the case of premiums charged to young drivers because underwriting experience shows that claims are heavier both as to frequency and amount than in the case of other policyholders.
The Committee of Enquiry into the Cost of Motor Insurance established in October 1981 was asked to examine the level of premiums payable by different categories of drivers including young drivers. The committee recommended that while insurers should be free to charge higher or lower premiums in respect of those categories of drivers or vehicles with better or worse than average claims experience, those charges should not exceed the amount shown to be statistically justified.
The committee also referred to the work of the Motor Premiums Advisory Committee which is engaged in a longterm analysis of the appropriateness of the loading factors applied by motor insurers including those applied to young drivers. That committee's preliminary findings have indicated that the loadings applied to young drivers broadly reflected the risk involved, but their examination is continuing.