Dáil Éireann Debate, Wednesday - 24 February 2021
234. Deputy Christopher O'Sullivan asked the Minister for Finance if he will consider measures to stop insurance companies increasing premiums on long-term, incident-free customers given that it is crippling businesses and community service providers; and if he will make a statement on the matter. [10591/21]
View answerAt the outset, while I have an appreciation of the specific issue the Deputy raises, neither I, nor the Central Bank of Ireland, can direct the pricing of insurance products, as this is a commercial matter. In addition, we cannot compel any insurer operating in the Irish market to provide cover to specific individuals or groups, such as businesses or community service providers. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
On a general level, my understanding is that firms will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, factors may include the policyholder’s type of business/service; their size; their claims record; and so on. Different factors will apply to different insurance products, and the weighting of each factor could possibly vary from year to year. Insurers also price in accordance with their specific claims experience and do not use the same combination of rating factors. Accordingly, premium prices vary across the market, demonstrating why it is important for consumers to shop around on their insurance policies.
While the Government cannot direct the pricing of insurance products, it can introduce reforms to assist in bringing the cost of insurance down. The Government’s Action Plan for Insurance Reform contains a range of deliverables, including legislation where required, in a number of Government Department policy areas. Work is already under way in relation to certain areas, including:
- increasing market transparency through the National Claims Information Database (NCID), including for employer and public liability insurance;
- reviewing the duty of care legislation;
- providing for the Judicial Council’s accelerated adoption by 31 July 2021 of new personal injuries guidelines to replace the Book of Quantum;
- consideration by the Department of Justice of the Law Reform Commission’s recent Report on Capping Damages in Personal Injuries Actions; and,
- looking at how to further enhance the role of the Personal Injuries Assessment Board.
Recognising that many businesses and self-employed persons need to see the impact of these reforms as soon as possible, the Action Plan contains 66 actions, 95% of which are due to be completed by the end of 2021. The focus is clearly on completing these actions in the short to medium term. I am hopeful that key reforms around personal injury awards may start to have an impact during this year on the pricing and availability of insurance.
As mentioned previously, it is important that policyholders shop around for insurance at renewal. In that regard, I would also highlight to the Deputy that an Office to Promote Competition in the Insurance Market has now been established in my Department. This will provide for more joined-up policy response on promoting competition in this sector, as well as provide for greater information to assist consumers and businesses to assist with shopping around. Minister of State Fleming will report to the Cabinet Sub-Group on Insurance Reform on the work of the Office.
Finally, where a policyholder feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
