At the outset it is important to note that 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 rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. 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.
Notwithstanding this, the difficulties faced by returning emigrants in respect of motor insurance was recognised by the Cost of Insurance Working Group’s and was the subject of a particular recommendation. In this regard, a protocol was agreed between Insurance Ireland and the Department of Finance in relation to returning emigrants, under which insurance companies committed to accepting the driving experience of such drivers gained while abroad, when the driver has had previous driving experience in Ireland. The details of it is available on Insurance Ireland’s website and the websites of its member companies.
The guiding principle of the protocol is to ensure that a returning emigrant is not treated differently to any other driver, subject to verification of their continued driving experience and the normal acceptance criteria of the company. Thus, a returning emigrant will not be disadvantaged from spending that time abroad. Furthermore, under the protocol, insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein. My Department continues to review the implementation of this recommendation through its regular engagement with Insurance Ireland.
With regard to the specific scenario in the Deputy’s question more precisely, I understand that in general, insurance companies set a date by which a no-claims bonus will expire, where the driver has held no insurance in their own name for 2 or more years. This applies whether the person continues to reside in Ireland, or they decide to move abroad and this is primarily a commercial matter for insurance companies. The protocol recognises this scenario and states that if more than two years have passed since the Irish motor insurance policy was cancelled/lapsed, the Irish No Claims Discount is no longer valid. Notwithstanding this, Insurance Ireland members have agreed through the protocol that if the person has claims-free driving experience in a different country in their own name, they will take this experience into consideration if that person seeks a quotation from an insurer, on their return to Ireland, subject to the appropriate verifiable documentation being provided.
Finally, I believe that the overall implementation of the CIWG’s recommendations is having a significant impact with regard to private motor insurance. The latest CSO figures from April 2019 show that the price of motor insurance is now 24.4% lower than the July 2016 peak, consequently the average consumer should be seeing reductions when renewing their motor insurance. In addition, I would note that representations made to my Department from returning emigrants have dropped significantly in the last year. I am hopeful that this reflects that more are receiving insurance cover in line with the protocol referenced above. The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.