Dáil Éireann Debate, Wednesday - 18 November 2015
15. Deputy Michael McGrath asked the Minister for Finance his views that the regulatory model has contributed to recent difficulties in the insurance sector; the actions he will take to deal with soaring motor insurance costs; if he will establish a task force to deal with insurance costs, given the success of this approach in the past; and if he will make a statement on the matter. [40354/15]
View answerAs Minister for Finance, I am concerned that there should be a stable insurance sector and to limit risks to policyholders and the wider financial system. I am aware of recent EU and IMF reports about the challenges facing the insurance sector at European level and, separately, of poor financial reports from some domestic insurance companies. Concerns about the increasing cost of motor insurance premiums have also been widely reported.
I have written to the Governor of the Central Bank on these matters. In his response, he has pointed to certain changes taking place that, in his view, are contributing to a volatile claims environment. He also made a number of suggestions for domestic policy which could bring greater stability to the operating environment for general insurance in Ireland. Neither the reports from the Governor nor from the international bodies referred to the regulatory model for insurance as a source of difficulty.
The question of the cost of insurance is a complex one involving a number of Government Departments, State Bodies and private sector organisations. The EU regulatory framework for insurance expressly prohibits Member States setting insurance premiums. However, this does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that would facilitate a reduction in claims costs.
I have asked officials in my Department to examine the issues being raised from multiple parties regarding the cost of insurance. This process has already resulted in engagement with a number of parties, both public and private, and it will continue over the coming months.
