Dáil Éireann debate -
Tuesday, 25 Mar 2003

Vol. 563 No. 4

Written Answers - Insurance Costs.

Paul Connaughton

Question:

165 Mr. Connaughton asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans to reduce the crippling cost of car insurance to young drivers; if her attention has been drawn to the ever increasing car insurance quotations for young drivers; and if she will make a statement on the matter. [7954/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

I am very much aware of the high cost of insurance in the State and I am concerned about the difficulties this is causing for many people, including young drivers.

On 25 October last, I announced my programme for fundamental insurance reform. The programme reflects the commitments given in An Agreed Programme for Government and comprises a comprehensive set of inter-related measures designed to improve the functioning of the Irish insurance market. The key measures include: establishment of a ministerial committee, chaired by myself, to oversee implementation of the reform programme, including the 67 recommendations in the Motor Insurance Advisory Board – MIAB – report; publication of the action plan to give effect to the MIAB recommendations within a target timeframe; establishment of the Personal Injuries Assessment Board – PIAB – on an interim basis, pending preparation of the necessary legislation to put the PIAB on a statutory footing; and publication of the report of the implementation group on the PIAB.

I am committed to bringing about improvements in the functioning of the Irish insurance market. My Department, in conjunction with the Competition Authority, finalised terms of reference last December for a study being undertaken into the competitiveness of the Irish insurance market. The terms of reference are available at www.entemp.ie and www.tca.ie. The study will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. It is envisaged that the bulk of the work will be completed this year and that a report will be produced in the early part of 2004.

While EU law precludes the imposition of price controls on insurance, I have made it clear that I expect aquid pro quo from the insurance industry, in the form of reduced premiums, in response to the reform programme. The insurance industry's response will be carefully monitored. The acid test will be the impact felt in the consumer's pocket. In this regard, it is heartening to note the recent reported comments from a number of the major motor insurers here, that further increases in premiums may not be necessary at present and, in one case, that they have already reduced premiums since the beginning of this year. As implementation of the measures contained in the reform programme continues, I would expect this trend to continue.