Written Answers. - Motor Insurance.
Michael Bell
Question:
67
Mr. Bell
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if her attention has been drawn to the exorbitant car insurance prices being charged to young drivers in the Louth-Meath area; if she has any plans to carry out an investigation into this unfair practice; if she has any powers available to her to restrict or reduce or cap car insurance premiums to young car drivers; and if she will make a statement on the matter.
[8740/01]
Motor insurance premia are normally based on underwriting experience including trends in the level, frequency and cost of claims, for particular risks and classes of risk and are a matter of judgment by individual private insurance companies. I am aware of car insurance prices varying across different regions of the country. However, EU law prevents us, from intervening directly with the insurance companies, in the matter of premium levels, or in respect of the risks, that they are prepared to underwrite.
Nevertheless, following publicity in recent years regarding differences in motor insurance in different areas of the country, our officials contacted a number of insurance companies to establish the reasons behind such pricing policies. The insurance companies stated that the differentials were attributable to rising motor claims' costs and formed part of an overall review of pricing policy, in respect of selected segments of the private motor insurance business. It was also confirmed that the increases in some areas were due to an increase in commuter numbers in those areas, with consequential increases in claims frequency.
The primary focus of initiatives aimed at reducing the cost of insurance for motorists, including young drivers, should be on reducing the frequency of accidents and the delivery costs of subsequent claims.
There are a number of such initiatives in place including, as a result of a recent Government decision, the establishment of a Personal Injuries Assessment Board. It is hoped that the work of the PIAB would, in the course of time, substantially reduce the number of personal injury claims being brought to court, thus reducing the legal and other costs involved in the delivery of personal injury compensation. It is expected that the board will be operational early in 2002.
Furthermore, the work of the Motor Insurance Advisory Board, which I re-established in 1998, is aimed at providing us, with the necessary information and advice, on trends in motor insurance costs and with policy recommendations for addressing those costs. The issue of the high cost of insurance for young drivers is especially being examined by the board. The recent release of the board's Interim report, under the Freedom of Information Act, has provoked an interesting debate. However, it is important to note that shortly after that report had been prepared, it became apparent that the data on which it was based was questionable. The MIAB is currently proceeding with an analysis of more accurate data; and it's final report is expected by the end of this year. Upon receipt of this report and taking all other initiatives into consideration, I will then decide as to what further action is appropriate to reduce the cost of motor insurance, in this country.
