Dáil Éireann díospóireacht -
Wednesday, 29 Mar 1995

Vol. 451 No. 3

Written Answers. - Insurance Intermediaries' Commission.

Willie Penrose

Ceist:

68 Mr. Penrose asked the Minister for Enterprise and Employment if his attention has been drawn to the reduction in commission payments to insurance intermediaries selling life insurance effected in January 1994; the effect, if any, this has had on the income of over 7,000 insurance intermediaries; if the consumer benefited from such reductions or if insurance companies retained the benefit; the increase, if any, in the cost of the annual premium to consumers in respect of life insurance policies from January 1994, to date; and if he will make a statement on the matter. [6547/95]

Minister for Enterprise and Employment (Mr. R. Bruton)

As the Deputy will already be aware from the reply issued to him on 22 July 1994, to his previous inquiry in the matter, my Department is cognisant of the revision, from 1 January 1994, of the rates of commission set out in the agreement on maximum rates of remuneration for life business operated by the Irish Insurance Federation.

With regard to the effect of these changes on the incomes of individual insurance intermediaries, I do not have available to me data on income levels of insurance intermediaries. However, I believe it is reasonable to assume, from the exceedingly low level of correspondence received in my Department to this issue, that the overall incomes of insurance intermediaries were not significantly adversely affected.

With regard to the question of impact on consumers, it is my understanding that the reduction in commission payments was intended to neutralise the effect on insurance premia paid by consumers of changes in the way insurance companies are taxed.

I would point out that the reduction in insurance commissions, provided for in the revision of the agreement, applied only to life assurance policies with a savings element. Term assurance policies (i.e. pure life protection policies without any savings component) were not affected.

With regard to the question of increases in the cost of premia for life insurance policies from January 1994 to-date, I understand that rates of premia for term insurance have fallen over the period in question. Rates of premia for savings policies vary, depending on the degree of risk or security chosen by the investor, so that no comparison of rates is readily available. However, I understand that there was no discernible upward movement in these aggregate rates over the same period.