Dáil Éireann Debate, Tuesday - 6 February 2018
143. Deputy Brian Stanley asked the Minister for Finance if he raised with the insurance industry the practice of refusing of insurance cover to drivers of cars over ten years of age even though the vehicle has a valid National Car Test certificate; the reason the insurance industry refuses such vehicles; the legal basis for such refusal; and if he will make a statement on the matter. [5785/18]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms and conditions that they should apply in respect of particular categories of drivers or vehicles.
Policy in relation to the NCT lies with the Minister for Transport, Tourism and Sport. The NCT was introduced to comply with an EU Roadworthiness Testing Directive aimed at improving road safety and environmental protection. While the NCT is one component of having safer vehicles on our roads, every vehicle owner has a personal and legal responsibility to ensure that their vehicles are roadworthy and well maintained. The NCT is an inspection or general “health check” of what is visible and accessible on the day of the test and includes a check of the roadworthiness of such safety features, amongst others, as lighting, brakes and tyres.
The NCT is a minimum requirement of roadworthiness and is therefore not the only rating factor taken into account in the provision of motor insurance. Insurers will generally require that a car has a valid NCT in order to be covered. However, in making their individual decisions on whether to offer cover and what terms to apply, they will also use a combination of other rating factors, which include the age of the vehicle, as well as the type of vehicle, the age of the driver, the relevant claims record and driving experience, the number of drivers, how the car is used, etc. My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to the age of a vehicle and the availability of cover, different insurance companies will use different age thresholds.
Notwithstanding the above, my officials contacted Insurance Ireland in relation to your question. In response, Insurance Ireland stated the following:
“Calculation of premium has many rating factors and age of vehicle is part of that process to determine the correct rate for the risk profile submission. The issue of age of vehicle relates to the acceptances criteria and whether some insurance providers will offer a quotation. This would be a matter of commercial discretion by each insurance provider and it should be also noted, that an insurance company/underwriter is entitled to set the level of premium for any risk or risks it has agreed to accept. Furthermore, there is no obligation on a financial service provider to disclose or divulge to its customers its specific commercial rating details.”
Finally, if a consumer is unable to secure a quotation on the open market, he or she may be in a position to avail of the Declined Cases Agreement (DCA) process. Under the terms of the DCA, the insurance market will not refuse to provide insurance to an individual seeking insurance if the person has approached at least three insurers and has not been able to obtain cover from them. In this regard, there are further details available on the Insurance Ireland website while Insurance Ireland also operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. The relevant contact details are: feedback@insuranceireland.eu or declined@insuranceireland.eu or 01-6761914.
