asked the Minister for Industry and Commerce if, in view of the fact that over two years have elapsed since the Commission on Motor Insurance was set up, its full report will be published before January next.
Ceisteanna—Questions. Oral Answers. - Motor Insurance.
102.
The Committee of Inquiry into the Insurance Industry was set up a little over one year ago, not two as the Deputy understands. I am aware that the committee is pressing on urgently with its examination of motor insurance and that considerable progress has been made. I am not in a position to state when precisely this complex operation will be completed, but I am hopeful that I will have received the report by January.
Is the Minister aware that insurance companies are fleecing car owners at present and that increases of 300, 400 and in some cases 500 per cent have been demanded? Does the Minister intend to take any action in this regard?
It would not seem to be appropriate to Question No. 102.
That is because they are all waiting for the result of the inquiry and the Minister seems to be standing idly by while insurance premiums are being increased. Does he intend to do anything about it?
On the next question.
103.
asked the Minister for Industry and Commerce what premium scale or specific basis was used when authorising increased premiums for motor vehicle insurance since 1967; if he is aware that many insurance firms ignored the authorised increases by doubling the percentage increases and cutting agents' commission by 50 per cent; and if he will explain why he did not take steps to ensure that authorised increases only were charged.
The increases which were sanctioned in motor insurance rates as from 1st January, 1969, and 1st June, 1970, were affected by means of the application of a specified percentage increase to existing basic rates.
I am aware, however, that many companies are applying loadings to premium rates for certain categories of risks in which claims experience has been particularly bad. I must accept the right of insurance companies to apply reasonable additional loadings in cases where claims experience has shown this to be justified.
In a number of previous replies, I have indicated the steps which I have taken in cases where it appeared that a breach of my arrangements with the companies might have occurred. I have had a large number of individual cases taken up with insurers. In some cases reductions were secured following intervention by my Department; in other cases the companies were in a position to show that increased rates were justified by claims experience or undesirable features of the risk. I must say, however, that in several cases I was not satisfied that the actual increases proposed were justified, but the companies concerned were not prepared, in the absence of statutory control, to reduce their charges. I am taking this matter up with representatives of the companies.
The amount of commission paid by insurance companies to brokers is a matter for settlement between the brokers and the companies. The reduction in commission referred to did not alter the basic premium rates.
As the Deputy is aware, a comprehensive examination of motor insurance is at present being carried out by the Insurance Industry Committee.
While the Minister may think it reasonable for these companies to increase premiums in certain cases, does he say that increases of 300, 400 and, in one case I know of, of 500 per cent are reasonable? In view of the fact that he has stated that he is not satisfied with the attitude of some companies in not reducing them without statutory control, will he now introduce the statutory control, and do so immediately, to compel them to give reasonable coverage to motorists?
Over the past 12 months since I set up this Committee, I have conveyed on all occasions, when questioned in this House, that I am not happy with the motor insurance industry as a whole. I am also reasonably satisfied that it is, as it at present stands, a not too remunerative industry as such. As I have said, I am not satisfied in relation to the replies I have had from insurance companies. However, at this stage, with the impending early report which I expect to have, as I said in reply to the earlier question, by January at latest, I would be hoping that the advice received from the committee might help me to deal comprehensively with this problem and I am not anxious at this stage to take interim measures to deal with it.
The Deputy referred to increases of 400 and 500 per cent. There are additional loadings and the main one I come up against is the loading which goes on by reason of the age of a car. It may be additional loading in so far as a driver wants a young son or daughter covered and these have been established to be additional risks. Maybe it is not always the young people, but to be practical about this, I have found even myself in driving around St. Stephen's Green when trying to get home at 10.30 at night the dicing that goes on in that circle. Those are factors which have to be carried by insurance companies and I am satisfied from the knowledge I have of the situation at present that one of my main responsibilities is to see that when there are claims, the insurance company will be able to carry the claim.
Would the Minister not agree that the insurance companies are jumping the gun in anticipation of his legislation and trying to get in before it?
I do not think——
It is plain to be seen that some are. Does he not agree that it is completely wrong to take into consideration the age of a car? I know cars ten years old which have not done 20,000 miles and cars six months old which have done 30,000 and 40,000 miles and are wrecked. Surely it is the state of the car, whether it is in good mechanical repair or not, that should be taken into consideration. If you have an old car, they load you completely—I agree with what the Minister said about young people driving cars—but——
I have endeavoured to make arrangements with the insurance company in relation to this loading on the basis of the age of the car and I have made an arrangement whereby the company have agreed to reduce the loading—there was a case where there was a 75 per cent age load on vehicles—to 50 per cent subject to a satisfactory engineer's report that the vehicle is in good order.
Is it not generally agreed that the business of insurance is particularly lucrative, if one is to go on the enormous buildings which they have continued to provide all over the city and country, and is it not an unusual ambition on the part of an enterprise to wish to make a profit on every sector of their undertakings? Surely it should be possible for the insurance people to carry their losses on the motor side out of the enormous profits which they make on the other side of their business—accidents and so on?
I do not think there is enormous profit to be made on fire——
Not now when there are people going round setting fire to places and getting away with it.
Accident insurance is separate and conducted by separate insurance companies from life insurance. I am hoping that the committee of inquiry will come up with possibly revolutionary ideas in this regard. I am rather hopeful they will.
Question No. 104.
Does the Minister think that the commission will investigate alcohol as an associated factor?
This is enlarging the scope of the question.
No, I do not think they will. That would be too wide a field.
It affects every citizen who drives a car.
Question No. 104. We cannot have a discussion on a single question.
One very short supplementary. If a certificate is issued in respect of an old car why should there be any loading on the premium?
No matter how roadworthy a 1960 car is, it cannot be as roadworthy as a new car.
(Interruptions.)
My car is a 1960 one.
It can be.
I said it cannot be as roadworthy as a new car. I did not say it cannot be as roadworthy as a new car that has been banged about at 100 miles an hour for six months.