Dáil Éireann díospóireacht -
Wednesday, 1 Jun 2022

Vol. 1023 No. 2

Insurance (Miscellaneous Provisions) Bill 2022: Report and Final Stages

Minister of State at the Department of Finance (Deputy Sean Fleming)

I move amendment No. 1:

In page 6, line 31, to delete “or in relation to”.

It might help if I give an explanation. It is a simple amendment. I will only take a few moments and then give Members of the Opposition an opportunity to speak. It is a very simple four-word amendment.

On Committee Stage I indicated that the Department was considering a technical drafting amendment to the new section 16A, which is being inserted into the Consumer Insurance Contracts Act 2019 by section 8 of this Bill, and that I might return with such an amendment on Report Stage. This is a minor, non-substantial amendment intended to align the text of the new section 16A with the original wording of section 16(10) of the Consumer Insurance Contracts Act. As the Deputies may recall, the purpose of this provision, which is already in force under section 16(10) of the Consumer Insurance Contracts Act, is to place mutual obligations on the insurer and the policyholders to disclose reports from experts relevant to the essence of any claim. The Bill before the House clarifies that this obligation in the Consumer Insurance Contracts Act does not infringe on the established principle of professional legal privilege and also specifies the types of reports to be shared.

Following the drafting process, the Department became aware of a non-substantial issue regarding the definition of the word "claim" for the purposes of section 16A. Section 8 of this Bill defines a claim as "a claim made under or in relation to a contract of insurance". This wording is not consistent with the original drafting of section 16(10) of the Consumer Insurance Contracts Act, which just refers to claims made under a contract of insurance. In this regard, the purpose of this amendment is to delete the words "or in relation to" so that the definition of a claim for the purpose of section 16A is simply a claim made under a contract of insurance and remains consistent with the current Act. In doing so, this should help to avoid unintended interpretation of the text and ensure legal certainty regarding the provision in the Consumer Insurance Contracts Act. It is clearly in everybody's interest to ensure clarity and legal consistency in these matters. I do not expect that Members will have an issue with what is a minor technical amendment.

To summarise, the original Bill brought forward by Deputy Doherty some time ago is the Consumer Insurance Contracts Act. This Bill is amending that Act. I flagged on Committee Stage that an amendment might be needed because there was an inconsistency with the definition of a word in the Act. We are proposing to delete the words "or in relation to" to make this Bill consistent with the wording of the Act which Deputy Doherty brought through the Oireachtas some time ago. It is a technical wording issue to ensure we are making this legislation and its wording consistent with the original legislation, and nothing further than that. It seeks to remove any potential ambiguity due to two slightly different definitions of the same thing. We want to ensure this legislation is consistent in its wording with the original legislation which it is amending. Members will accept that it is just a technical amendment. I hope everybody will agree on that and approve the amendment.

Deputy Pearse Doherty

As the Minister of State has said, this is a technical amendment. Sinn Féin does not oppose it. It is the only amendment on Report Stage.

I have made my views known about some of the legislation, which does not really do much. There are big questions about the gathering of information by the Central Bank and what the Minister of State plans to do about the insurance industry pocketing subsidies that were paid by the taxpayer and were supposed to be there for companies, not the insurance industry.

I wish to focus on the measures on dual pricing contained within this legislation. The Bill seeks only a report on their implementation. I am very glad we are getting closer every day to the point at which dual pricing will be banned in this State. It is an exploitative practice. I sometimes criticise the Central Bank for being slow to respond, but I am very glad that, in fairness to it, on the back of my complaint nearly two years ago and the meeting with the Governor of the Central Bank, it has acted and has brought forward these recommendations. I think it is well known this is not the way in which I would have banned dual pricing. I think there is still far more wriggle room for exploitation within the insurance industry here compared with the position in Britain. That is concerning as to how this will be applied and implemented, and I have raised that with the Central Bank both in written correspondence and verbally.

I am more concerned about it now, given some of the information coming out of Britain, which has a far harder ban than what we are planning here. It is clear the British insurance industry is finding or trying to find ways around these measures and pricing the same risk differently, depending on the mechanism used to take out the insurance in the first instance. For example, a person who was an online customer a number of years ago is pegged against that online price as opposed to the price that person would have paid had he or she taken out the insurance through contacting the insurer in the first place. The industry is still finding ways to involve itself in differential pricing. The difference is that in the North and in Britain, from day one there cannot be differential pricing in the market, whereas the Central Bank here will allow differential pricing up to the first year. That raises concern.

That said, I recognise we have come a long way from a free-for-all for the industry, whereby hundreds of millions of euro was additionally charged on more than 2.5 million customers through this type of practice. The Bill will drive down insurance prices, all things being equal, but we know the insurance industry always finds some excuse to put prices up again. This needs to be monitored very carefully. The Dáil, the Oireachtas and particularly the Central Bank need to be agile regarding this ban, which will come in on 1 July. It is only weeks away now. We need to be sure of the intention of the Central Bank. My original intention more than two years ago when I made my major complaint, and the intention, I believe, of all Members of the Dáil, is to make sure insurance is priced fairly and based on risk, not other factors that would be seen to be exploitative.

Amendment agreed to.

Bill, as amended, received for final consideration.

Question proposed: "That the Bill do now pass."

Minister of State at the Department of Finance (Deputy Sean Fleming)

I am grateful for the contribution of Deputy Doherty, in particular, and other members of the Opposition to the entire insurance debate, as exemplified during the course of the passage of this legislation.

Deputy Pearse Doherty

Again, I recognise the work that has been put into this, especially by the officials, and all the support on Committee Stage. While there are varying degrees of the effectiveness of this legislation, I say not only on behalf of my party but also, I think, on behalf of Members right across the House that there is an appetite in the House for insurance reform. The Minister of State should use that as much as possible to drive through the reforms at the pace necessary in society. I thank the Minister of State for his contribution and for answering the questions raised on Committee Stage. I also thank the Department officials.

Question put and agreed to.