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Dáil Éireann díospóireacht -
Thursday, 31 Oct 1968

Vol. 236 No. 11

Ceisteanna—Questions. Oral Answers. - Motor Insurance Charges.

67.

asked the Minister for Industry and Commerce whether his approval was sought for the increases in car insurance announced by the insurance companies, and whether in view of the heavy burden these increases will place on motorists he will state the reasons for his decision.

68.

asked the Minister for Industry and Commerce if he is satisfied that the recent decision to increase motor insurance charges is justified.

69.

asked the Minister for Industry and Commerce if he is aware that a number of insurance companies have announced that they propose to increase the rates of premiums on motor vehicles; and if he will make a statement on the matter.

With your permission, a Leas-Cheann Comhairle, I propose to take Questions Nos. 67, 68 and 69 together.

The insurance companies applied some time ago for a substantial increase in motor insurance rates. Having examined their application, I came to the conclusion that while I could not accept it in full an increase of 10 per cent in third party rates was justified because of the heavy, and increasing, underwriting losses incurred on this business in recent years. I also decided to relax control of the rates applicable to comprehensive policies.

Is the Minister aware of the statement issued by the Private Motorists Protection Association to the effect that this increase is uncalled for and unnecessary and, in the light of that statement, does he still believe he was justified in granting the increase?

The answer to both parts of the Deputy's question is——

——"Yes." I am aware that this statement was made.

And the Minister still believes he was justified in granting the increase?

I still believe the increase was justified, having regard to the figures, as I said, of underwriting losses, which losses have been heavy and increasing in recent years. The Deputy will be aware that the company which made the statement to which he referred has not been very long in business. If it should succeed in carrying on business in such a way as not to incur these heavy underwriting losses, thereby enabling itself to quote very much lower premiums, no doubt it will reap the benefit of this form of business.

Could the Minister state if there are any restrictions as to the amount by which a company may increase premiums as a result of claims? Is there any limitation as to the increases they can make?

There is no statutory limitation. In general, it may be taken that the company can give a quotation to someone who has been involved in an accident based on that person's accident record. If the person thinks the amount quoted is unreasonable he may, of course, look for business somewhere else. I think there is a procedure whereby he can appeal against it.

Is the Minister aware that no company will take him once he has been rejected? Is the Minister further aware that in some cases they have asked for treble the premium for a renewal, and that in cases in which they have paid out less than £100? No other company will take on such people because the original company asked for a certain premium and the insurers could not meet it.

As far as I am concerned, the Deputy will gather from the reply I have given that I am anxious to try to ensure that any increases in third party insurance will be kept to the minimum in order to cater for the person who cannot afford any more than that. In cases in which there would appear to be unreasonable increases in third party insurance I would be prepared, if given the details of such cases, to see if I can do anything about them. In regard to comprehensive insurance, it seems to me that is a matter of ordinary business and competition.

Has the Minister's attention been directed to the statement made by a representative of the insurance companies on Telefís Éireann, in the course of a programme in which he participated that, consequent on the Minister's approval of the increased rates, the companies proposed to review the whole rate structure since, in the light of the British experience, they considered the existing structure to be too high? Does this not suggest that the Minister was, perhaps, a little premature in his approbation of the proposed increase in the basic rate structure?

No, I do not think so. My attention was not directed to that statement, but I would surmise that what was in question was a restructuring of "No claim" bonuses. I am aware of the fact that insurance companies are considering this. I am not aware of any question of considering changes in the basic charges except in so far as there was a reference made in a statement issued by the insurance companies proposing to make a minor adjustment in regard to the value of the car insured.

Perhaps the Minister would cause enquiry to be made.

While everybody knows my commercial interest in this matter, may I ask is it not a fact that the entire insurance market is losing money year after year in relation to motoring premiums? I am afraid it is also a fact that Deputy Dillon has entirely misunderstood what was, in fact, stated. What was stated was exactly what the Minister has stated now, namely, that the basic premiums might be better in one way with higher no claim bonuses for accident free records.

I would not wish to engage in question and answer with Deputy Sweetman. It would be highly unbecoming. But is the Minister aware that the statement made by Deputy Sweetman was, in fact, made on Telefís Éireann and I thought the insurance companies were quite properly asked: "Well, why the hell are you all competing for business then?"

Because you have to do that or wind up. It is quite simply: do that or wind up. Is the Minister not aware of what will happen? The Irish companies, who have no resources by way of profits in other countries, will be forced out of business and the British and other companies, who can make profits elsewhere, will stay? Is the Minister not further aware that that is exactly what happened in South Africa?

I am aware of this danger. It is a real one.

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