Dáil Éireann Debate, Tuesday - 22 May 2018
143. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the protocol agreed between an organisation (details supplied) and his Department; his views on whether policyholders should be provided with specific reasons as to why their particular insurance premium has increased; and if he will make a statement on the matter. [22339/18]
Amharc ar fhreagraAs the Deputy is aware, in fulfilment of Recommendation 1 from the Report on the Cost of Motor Insurance, a protocol was agreed between Insurance Ireland and my Department which provides a list of reasons for large increases in motor insurance premiums. The content of the agreed document is available on the websites and the social media channels of the major motor insurance providers, and will also be provided to policyholders on renewal.
My Department is satisfied that the information being provided to policyholders fulfils the essence of the recommendation without a need for legislation to underpin it as had been originally stipulated in Action Point 2, which was formulated at a stage when it was envisaged that the document provided to policyholders would be bespoke in nature. It does not consider that it is necessary at this juncture to pursue legislation in respect of the non-bespoke protocol which has been agreed through non-legislative means but will continue to monitor how the protocol is functioning in practice.
In an ideal scenario, I believe policyholders should be furnished with the specific reason or reasons for an increase in their insurance premium. However, the main reason why such a bespoke document cannot be provided is because my Department has been advised that the complexity of the interaction between the customer-facing systems and the underwriting systems in all modern insurance companies would make it very difficult to delineate specific reasons for an individual premium increase. If insurers were to try and link these systems in order to address this issue, it would require very significant IT infrastructural changes at considerable cost, which would almost certainly in turn lead to higher premiums. In addition, the Working Group believes that such an onerous requirement could result in the unintended consequence of discouraging new entrants to the market. Nevertheless, as part of the protocol consumers will be provided with contact details of their insurance provider in order to enable them to receive more “tailored” information if they do not believe any of the listed reasons apply to their situation.
I am keen to improve the level of information provided to policyholders by seeking to have the previous year’s premium included in renewal documentation. My Department has discussed this matter with Insurance Ireland. It also requested that this information be included in renewal documentation by means of a submission to a consultation which was undertaken by the Central Bank of Ireland – Consultation Paper 114: “Amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No. 74 of 2007)” – which is pursuant to Recommendations 2 and 3 from the Motor Report, and continues to engage with the Central Bank accordingly.
This is an issue which I will continue to keep under review.
