The underwriting criteria used by insurers are normally based on their experience of underwriting particular risks. This includes trends in the level, frequency and cost of claims for particular segments of risks of the insurance market and classes of risk and are a matter for judgment by individual private insurance companies. It should be remembered that these are issues upon which insurance companies make decisions and EU law prevents us from intervening directly with insurance companies in the matter of premium levels or in respect of the risks they are prepared to underwrite.
The recent release of the interim report of the Motor Insurance Advisory Board under the Freedom of Information Act has provoked much debate on the statistical basis for the insurance industry's argument that young drivers are a very high risk category. However, it is important to note that at the time the report was prepared, the board recognised that the raw data available to it was incomplete.
The board emphasised at this point, that the indicators in the report could not be regarded as conclusions. The issue of the high cost of insurance for younger drivers is especially being examined by the board. The final report of the board is expected by the end of this year and its recommendations are awaited with great interest. In the light of those recommendations, I will consider what further action is appropriate towards the goal of the reduction of the cost of motor insurance.
Since the transposition into Irish law of the EU Third Framework Non-Life Insurance Directive, authorised insurance companies may provide motor insurance throughout the EU on the basis of their home country authorisation. Currently there are 27 authorised motor insurers – 15 companies with their headquarters in Ireland, 11 based in other EU member states and one non-EU insurer who are all authorised to underwrite motor insurance in Ireland. The list of all these authorised motor insurers is available in the 1999 annual report of the insurance division of the Department of Enterprise, Trade and Employment.