asked the Minister for Industry, Trade, Commerce and Tourism if he is aware that most insurance companies operating in the motor insurance field will not accept any proposals from persons under the age of 25 years; if he is aware of the very heavy loading of premium prices in such cases in the limited number of cases where such proposals are accepted; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Motor Insurance.
21.
I am aware that concern has been expressed recently over the availability of motor insurance cover for young drivers. While I cannot compel an insurer to take on particular risks, all motor insurers in the State undertook in 1981, in the context of the Decline Cases Agreement, not to decline a risk on grounds of age of driver alone.
If the Deputy has particular details of individual cases of cover being declined on grounds of age alone he should forward these to the Department for investigation.
It is common practice, and has been for many years, to place heavy loadings on the premiums charged to younger drivers. This reflects the increased risk of accidents and claims involving such policy holders. The higher risk involved is indicated by the road accident statistics published by An Foras Forbartha and by the examination of premium loadings and claims experience carried out by the Motor Premiums Advisory Committee. If any young driver feels he is being excessively laded he can refer his case to the Department for examination.
How many cases of persons under 25 refused insurance cover have been heard by the Declined Insurance Committee in the past 12 months?
I do not have that information. I agree it is relevant and will obtain it for him.
I appreciate the Minister might not be in a position to give me that information but will give it later on. In the meantime can he indicate the number of insurance companies writing motor insurance and the average extra loading as a percentage of the average premium paid by persons under 25 years of age that exists?
I have a mass of information on the loadings applied by all companies quoting under headings of age loading and loadings for inexperience.
The age loading.
They are related but are not the same. It is a long table and is not expressed as an average. I can give the Deputy a few samples.
Five major insurance companies.
Take General Accident Fire & Life Assurance Corporation Limited. They have 150 per cent loading from 17 years of age to 20 years of age. It falls to 100 per cent from age 21 to 24 and between the age of 25 and 29 they have a 25 per cent loading with no loading over the age of 29. Hibernian Insurance Company Limited have a 125 per cent loading from ages 17 to 20 years. From age 21 to 24 they have a 75 per cent loading and from age 25 to 29, a 20 per cent loading. In the case of the PMPA, 100 per cent for age 21 and under and from age 22 to 24 a 50 per cent loading. I have given the Deputy an indication of what the loadings are but rather than continue to pick out some which might be invidious as regards comparisons it would be better to give him the entire list and he could look at them himself.
The Minister is the licensing authority for people writing motor insurance. He has the power to decide that insurance companies will not act in a discriminatory way against young people. It is obvious from the few samples he has given that there is a wide disparity in the way insurance companies deal with different categories. The Minister has a duty to see that fair play is done by the companies. In granting the annual licence he should see to it that certain categories are not discriminated against.
I am not sure that the licensing arrangements would provide an appropriate opportunity for what the Deputy has in mind. Applications for increases in premiums, which must be approved by me, would probably be the most appropriate method of achieving what the Deputy has in mind. Investigations in this area by the Motor Premiums Advisory Committee indicate — this was stated by my predecessor on 24 November — that the loadings applied to young drivers broadly reflect the risk involved. This risk is borne out in the higher road accident statistics affecting young people published by An Foras Forbartha. This expert body indicates — this may not apply to individual companies — that broadly speaking the practice is in line with the actual risk involved as reflected in the statistics.
Would the Minister agree that one of the major contributory factors for the collapse of a major motor insurer last year, the subject of legislation in this House, was that the company was the only major motor insurer interested or willing to take on this category of person and that there was considerable resistance by all other insurers to have anything to do with the young motorist under 25 years of age? This led to a very serious situation last year. Does the Minister not agree that that loading should be spread evenly among all motor insurers writing insurance here?
It is a matter for each company to decide in the first instance what loading it wants to apply. No company is forced to apply a loading. That is as far as I can go in replying to the Deputy's question. It would not be appropriate for me to engage in discussions in regard to the instance the Deputy has in mind. If the Deputy wants to put down a question about that he is free to do so but I would not wish to become involved in it at this stage.
A final supplementary. Deputy Brennan has been trying to get in for some time.
I should like to take the matter up with the Minister. It must be clearly stated that the PMPA as a major insurer was the only Irish insurer willing to take on this category of person. The Minister has a duty to see that high risk insurance is spread equally among all those willing to provide insurance. Those who are not willing to undertake this course should have their licences looked at.
To the extent that one company offer lower loadings than another, it would be impossible for me to prevent young people going to that company and placing their insurance there, leading to a situation where that company that offered the lower premia had a larger share of the business. It is not within my power to do that unless I were to force them to raise their loadings and I do not think the Deputy would wish that.
They had no alternative but to do that because the other companies would not consider the applications.
I already answered the Deputy's question when I pointed out that the Motor Premiums Advisory Committee decided that the loadings overall reflect the relative risk.
The State insurance company is the only one that will take this category.
The remaining questions will appear on tomorrow's Order Paper.
May I ask the Chair——
I will come back in due course to what the Deputy has in mind.
How can the Chair know what is in my mind when I have not spoken?
I have a fair idea. The House will now deal with an expression of sympathy——
The Chair ruled out of order a Private Notice Question regarding the closure of Fords in Cork. It is quite incredible when we talk about Dáil reform that these questions should be ruled out of order.
I ask the Deputy to permit the House to deal now with a motion of sympathy.
Surely it is in order to ask a question——
It is not in order at any time but it is less in order now than it would be later on.