Vol. 458 No. 5
41 Mr. Sargent asked the Minister for Enterprise and Employment the plans. if any, he has to regulate the use made by insurance companies of the no claims bonus and loading; and if there is any evidence to suggest that these devices actually reduce risk. [15237/95]
I have no plans to regulate the no claims bonus and loading schemes operated by insurers. Insurers maintain that the no claims discount system encourages safe driving. It provides the incentive of reduced premiums for claims-free driving on the one hand, and the system of loadings acts as a disincentive to accident claims, on the other.
The Deputy may be aware that the use of no claims bonuses and loadings by insurers is universal throughout the EU and is not subject to State regulation. In the EU single insurance market the determination of insurance premiums is based on insurers' underwriting and claims experience and the need to provide funds to meet claims as they arise. My primary responsibility in relation to insurers is to ensure that they meet their statutory solvency and reserving requirements. In that regard, my Department's financial supervision of insurance companies influences the setting of premiums inclusive of no claims bonuses and loadings at adequate levels to comply with the insurer's statutory financial guarantees.
