asked the Minister for Industry and Commerce the reason for his recent decision to sanction increases in motor insurance premiums; if he has any proposals to bring motor insurance premiums in this country into line with other EC countries; and if he will make a statement on the matter.
Written Answers. - Motor Insurance Premiums.
40.
The Deputy will be aware that price control was removed by the Government in January 1986. Since then motor insurers are required only to notify my Department of alterations in their rates. The sanction by me of increases in motor insurance premiums referred to by the Deputy does not, therefore, arise.
My primary and indeed statutory duty as the insurance supervisory authority is to ensure that insurance companies, including motor insurers, maintain their statutory reserves and solvency requirements. I must, therefore, respect the right of motor insurance firms to make their own underwriting decisions, including the setting of motor insurance premia, in the light of their underwriting experience.
Monitoring of insurance rates indicates that despite the recent increases the Deputy refers to, many motorists are now paying less for their insurance than they were in 1987, mainly because of increased competition in the market. However, I am aware that underwriters' losses have been increasing. Unless there is an improvement in the underwriting experience one cannot expect overall reductions in rates for motor insurance.
The price of motor insurance in this country, as indeed in any other market, is substantially dependent on the frequency and level of claims. Unless and until the claims experience in Ireland matches that obtaining in other EC countries there will be divergences between motor insurance premiums in Ireland and those applying in other member states of the EC.
Let me add that the Government are committed to improving the environment for motor insurance and it is my intention to ensure that should the claims experience of underwriters of motor insurance improve, appropriate benefits will be passed on to the consumer.