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Motor Insurance Coverage

Dáil Éireann Debate, Wednesday - 27 February 2019

Wednesday, 27 February 2019

Questions (64)

Brendan Griffin

Question:

64. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) regarding insurance; and if he will make a statement on the matter. [9796/19]

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Written answers

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting such rules. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in respect of particular categories of drivers or vehicles.

In making their individual decisions on whether to offer cover and what terms to apply, insurers will use a combination of rating factors, which include how the vehicle is used, as well as the age and type of the vehicle, the age of the driver, the relevant claims record and driving experience, and the number of drivers. My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to particular categories, different insurance companies will have different views.

However, it is acknowledged that pricing in the motor insurance sector has been subject to a lot of volatility in recent years with a related problem, as referred to in the PQ, being the availability of cover in the first place. These issues were the main impetus for the establishment of the Cost of Insurance Working Group. Its Report on the Cost of Motor Insurance was published in January 2017. The Report makes 33 recommendations with 71 associated actions, set out within an Action Plan.

Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and it is envisaged that the next quarterly Progress Update on implementation will be completed shortly and concentrate in particular on outlining the definitive position in relation to all of the 33 recommendations from the Motor Report as the last of the deadlines within its Action Plan passed at the end of 2018.

In this regard, it is important to acknowledge that, according to the CSO statistics, pricing in the motor insurance market has stabilised over the last year, albeit it is accepted that premiums are still at a high level for many people and that further decreases would be desirable. With the full implementation of all of the recommendations of the Cost of Insurance Working Group, I believe that Ireland will be more attractive to new entrants thus increasing capacity as well as competition which should have a positive impact in niche areas such as motor insurance for musicians.

Finally, as the Deputy may be aware, if a consumer is unable to secure a quotation on the open market, they may be in a position to avail of the Declined Cases Agreement (DCA) process. Under the terms of the DCA, which is adhered to by all motor insurers in Ireland, the insurance market will not refuse to provide insurance to an individual seeking insurance if the person has approached at least three insurers and has not been able to obtain cover from them. In this regard, there are further details available on the Insurance Ireland website, while more generally, Insurance Ireland also operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. The relevant contact details are: feedback@insuranceireland.eu or declined@insuranceireland.eu or 01-6761914.

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