At the outset, the Deputy should note that 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 price or the level of cover to be provided either to consumers or businesses.
However, I acknowledge the general problems faced by many consumers across the country in relation to the cost and availability of insurance. I also appreciate that there is some frustration about the perceived pace of reform. Unfortunately, there is no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises. This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of businesses seeking insurance.
Notwithstanding the above, I wish to reemphasise how important this issue is for the Government. As the Deputy is aware, the Cost of Insurance Working Group (CIWG) was established in July 2016 and undertook an examination of the factors contributing to the increasing cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses. The Deputy will recall that the CIWG has produced two reports since its inception and has been working to implement the 33 recommendations of the Cost of Motor Insurance Report published in 2017, as well as the 15 Recommendations of the Cost of Employer and Public Liability Insurance Report, published in 2018.
Quarterly progress updates on the implementation of both of the CIWG reports provide more detailed information on the implementation of each of the recommendations and actions. The ninth quarterly update was published in July and is available on the Department’s website. It shows that vast majority of the recommendations due before Q2 2019 have been completed.
I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from May 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance.
As outlined to the Deputy in previous PQ responses (including PQs 25241/19, 17651/19, 9764/19, 7359/19, 48428/18 and 40780/18), stakeholder consultation formed the foundation upon which the two primary reports of the Cost of Insurance Working Group and the accompanying recommendations were developed. This consultation process involved a wide range of stakeholders representing the different voices within this sector, including representative bodies, the major individual motor insurance providers and interest groups. The impact of excessive premiums being charged to consumers from all counties across the country was a feature of this engagement process with industry.
In addition, Department officials regularly raise specific issues affecting consumers across the country during their ongoing engagement with Insurance Ireland. Furthermore, Minister of State D’Arcy has separately met with representatives from insurance companies and other stakeholders in relation to a number of issues and the problems resulting from high insurance premiums have been discussed during these engagements.