Dáil Éireann debate -
Thursday, 6 Jun 1991

Vol. 409 No. 5

Written Answers. - Taxi Insurance.

Seán Barrett

Question:

97 Mr. S. Barrett asked the Minister for Industry and Commerce if he will outline the number of insurance companies who are currently underwriting motor insurance for taxis; if his attention has been drawn to the fact that a company (details supplied) is charging the same premium for each additional driver as that charged to the insured; if his attention has further been drawn to the fact that loadings carried by the insured will also be carried by the additional driver even though that person may have an accident free record; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

There are 28 insurance companies authorised to transact motor insurance, which includes taxi insurance, in this country. However, some insurers are at times reluctant to offer quotations for certain risks. I would point out that such reluctance will normally flow from experience. It can be that an insurer has had a poor claims experience on a particular policy, or perhaps the poor performance of a company's account in a specific area of cover is reflected in a company's attitude to quoting for risks in such area. However, individual insurers are generally willing to quote for what they would term a reasonable risk.

The Deputy will be aware that price control on insurance premia was abandoned in January 1986. Since then insurers, including motor insurers, are required only to notify my Department of alterations in their rates. I have no role in sanctioning such alterations.

The company to which the Deputy has referred have notified my Department of an increase in their loadings for additional drivers on taxi policies. The loading/premium for the additional driver is now the same as the policyholder's third party premium. An extra loading for additional drivers would not appear unreasonable given that the existence of such drivers would most likely signify that the vehicle would be in service for longer periods, perhaps 24 hours a day, and therefore exposed to a greater degree of risk.

Any loadings which insurers apply are an underwriting matter and strictly the preserve of the particular insurance company. I have no function in allowing or disallowing specific loadings. However, statistics show that, among the main classes of motor vehicles, taxis have the highest claims frequency rates and are almost four times more likely to be involved in an accident than are private cars.

I would like to remind the Deputy of what I have said in this House on numerous occasions, in that, as the insurance supervisory authority, I have a responsibility to ensure that insurance companies meet their statutory solvency and reserve requirements. I do not have responsibility for the day to day operations of insurance companies. Therefore, I must respect the right of insurance companies to make their own underwriting decisions in the light of their particular circumstances and assessment of the market. No legal obligation can be placed on any individual insurer to quote in respect of any risk, to quote at any particular premium or to quote in any particular manner.