Dáil Éireann Debate, Tuesday - 17 April 2018
250. Deputy Thomas P. Broughan asked the Minister for Finance if he has raised with the insurance industry the practice of refusing car insurance cover to drivers; the number of drivers refused insurance in 2017 and to date in 2018; the reason for these refusals; and if he will make a statement on the matter. [15789/18]
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 has the power to direct insurance companies on the pricing or provision of insurance products. Indeed, the EU framework for insurance 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. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. These are considered by insurance companies on a case-by-case basis.
Motor insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. Factors include, for example, the age and type of the vehicle, the age of the driver, the relevant driving experience, the claims record, the number of drivers and how the vehicle is used.
However, as the Deputy may be aware, under the terms of the Declined Cases Agreement (DCA), which is adhered to by all motor insurers in Ireland, the insurance market will not refuse to provide insurance to an individual seeking motor insurance if he or she has approached at least three insurers and has not been able to obtain cover from them.
I am not responsible for the operation of the DCA and therefore I do not have direct access to the number of drivers who applied through the DCA process in 2017 and 2018 to date, and certainly not the total number of drivers who were refused a quotation over the same period, as such information is not collated by any organisation.
However, in order to be as helpful as I can, my officials contacted Insurance Ireland seeking the DCA application figures. In response, Insurance Ireland provided statistics on the number of cases it dealt with in 2017 and Q1 of 2018.
The total number of DCA applications in 2017 was 1,423. This represented a drop of approximately 27% on the number of cases in 2016 (1,941). The figure for the first quarter of this year is 322, a decrease of 26, or 8%, on the corresponding period last year.
The total number of cases is broken down into various categories according to the main reason perceived by Insurance Ireland for the applicant having been declined motor insurance. In relation to 2017, for instance, the five categories accounting for the highest number of cases, in descending order, were:
- “Hackney/Taxi Drivers” – 275
- “Convictions” – 261
- “Cancelled/Non-Renewed Policies” – 260
- “Claims” – 194
- “Non-Disclosures” – 109
Other categories include: “Occupation”, “Vehicle Make/Model” and “Additional Drivers”.
In relation to these cases, Insurance Ireland has informed my officials that all applications submitted were accepted by Insurance Ireland for processing under the DCA. It has also stated that a quotation was secured for every applicant.
Finally, the Deputy should note that the Cost of Insurance Working Group, in its Report on the Cost of Motor Insurance, recommended the Declined Cases Agreement process should be made more transparent. On foot of this recommendation, Insurance Ireland submitted a report on the operation of the Agreement to my Department in July 2017. In the report, Insurance Ireland states that it “believes that the time may be correct for a review of elements” of the Agreement. My Department accepted this proposal and has since hosted two workshops with relevant stakeholders who are examining which elements of the Agreement need to be amended or refined. I understand further workshops will take place throughout 2018.
