Dáil Éireann Debate, Tuesday - 22 May 2018
146. Deputy Michael McGrath asked the Minister for Finance the tangible effort being made under recommendation No. 5 of the report on the cost of motor insurance since its publication; when he expects a fully functioning European insurance market to be up and running; and if he will make a statement on the matter. [22342/18]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. I would like to clarify at the outset that it is possible for an insurance undertaking authorised in one member state to conduct business in another EU/EEA state either through:
- establishing a branch operation in the host country and thus conducting business on a ‘freedom of establishment’ (FOE) basis; or
- writing business from the home country (i.e. where authorised) into the host country on a ‘freedom of services’ (FOS) basis.
In both situations the undertaking is required to meet certain obligations in the host member state, such as becoming a member of the national bureau and the national guarantee fund. These are important requirements as the Bureau is tasked with meeting the requirement of compensating victims of accidents caused by uninsured and unidentified vehicles.
Notwithstanding the extent of the existing framework, the Cost of Insurance Working Group heard from a number of stakeholders that there is room for further harmonisation in cross-border insurance. As the Working Group concluded however, this is a pan-European issue which will only be resolved at that level. In this regard, Recommendation 5 of the Report on the Cost of Motor Insurance recommended that the Department of Finance support efforts and raise awareness of this need to improve cross-border insurance at EU level. The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf. That Report outlines the implementation of this recommendation.
In this regard, the Department of Finance is monitoring developments at EU level on an ongoing basis and has instructed the Permanent Representation in Brussels to hold consultations with relevant institutions on issues raised in the report. I understand that officials in the Permanent Representation have been working on ensuring that the key messages from the Working Group’s report are understood by relevant EU officials in Brussels. However, work at EU level will very much depend on the priorities of the European Institutions, especially in the context of the ongoing negotiations with the UK as regard its exit from the EU.
I understand that the European Commission will shortly publish a revised Directive on Motor Insurance, subject to its approval. This proposal will likely cover a range of issues including the portability of claims history statements throughout the EU, possible guarantees towards victims in cases of insurer's insolvency, the scope of the Directive and the insurance of autonomous cars. All of these issues are relevant to the work of the Cost of Insurance Working Group and I welcome the fact that this proposal is due to be published soon.
Finally, an important point to note is that an insurer in considering whether it wants to take on Irish risk business will look at a wide range of factors including the award levels, the legal system, the general claims culture etc. Therefore ultimately, even if we do get a more efficient and accessible EU insurance market, there can be no guarantees that insurers in other jurisdictions will automatically be willing to take on Irish risk.
