Dáil Éireann díospóireacht -
Thursday, 17 May 2001

Vol. 536 No. 4

Written Answers. - Motor Insurance.

Brian O'Shea

Ceist:

75 Mr. O'Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment the proposals she has to ensure that there will be more competition from outside the State regarding the cost of motor insurance for young car drivers; if she will ensure that there will be a greater transparency in the methods that insurance companies use to calculate the tariffs levied on young drivers; if there will be a fair reduction in the cost to young drivers between 20 and 25 years of age in regard to car insurance; and if she will make a statement on the matter. [14379/01]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

Since the transposition into Irish law of the EU Third Framework Insurance Directive in 1994, European Communities (Life Assurance and Non-Life Insurance) Framework Regulations, 1994, insurance companies authorised in any member state may provide insurance cover throughout the EU, on the basis of their home country authorisation. This has opened up the Irish market to competition from insurance providers in other EU countries and has increased choice of product to the benefit of the Irish consumer. Currently, there are 27 insurers authorised to underwrite motor insurance in Ireland. Fifteen companies have their headquarters in Ireland, 11 are based in other EU member states and one is a non-EU insurer. In addition, I believe that the removal of the cap on brokers' commission will encourage further competition in the Irish market.

The underwriting criteria used by insurers are normally based on their experience of underwriting particular risks. This includes trends in the level, frequency and cost of claims for particular segments of risks of the insurance market and classes of risk and are a matter for judgment by individual private insurance companies. The issue of the high cost of insurance for young drivers is especially being examined by the Motor Insurance Advisory Board. The MIAB will be reporting later this year and I will take whatever further action is appropriate towards the goal of the reduction of the cost of motor insurance.

It would appear desirable that there should be greater transparency in the underwriting and pricing of motor insurance. However, it should be remembered that these are issues upon which insurance companies make decisions and EU law limits the extent to which we can intervene in the pricing and underwriting of insurance in this country.

Finally, I am confident that the establishment of the personal injury assessment board will achieve a reduction in the delivery costs of personal injury compensation for work related injuries, in its initial term of operation, and later in motor injury cases.