Dáil Éireann Debate, Tuesday - 29 May 2018
165. Deputy Thomas P. Broughan asked the Minister for Finance the steps he is taking to ensure that consumers receive the full benefit of the single EU market for all insurance products; and if he will make a statement on the matter. [23199/18]
Amharc ar fhreagraI 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 relation to motor insurance, 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, chaired by Minister of State Michael D'Arcy, T.D., heard from a number of stakeholders, particularly in relation to motor insurance, the view that there is room for further harmonisation in cross-border insurance. The Working Group concluded however, this is a pan-European issue which will only be resolved at that level.
Consistent with the Working Group’s recommendation, my Department is monitoring developments at EU level on an ongoing basis in relation to the issue of cross-border insurance provision and has instructed the Irish Permanent Representation to the EU to hold consultations in Brussels with relevant institutions on issues raised in the two Cost of Insurance Working Group Reports. However, it is important to note that work at EU level very much depends 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.
An update on this work was included in the Fifth Quarterly Update Report, which is available at the Department of Finance’s website at: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf
The current position at EU level is as follows:
- The Central Bank of Ireland (CBI) has an ongoing engagement with the relevant European authorities in order to ensure common standards are applied consistently. In addition, the CBI fully participates in EIOPA (the EU overarching insurance regulatory body) to establish high quality common regulatory and supervisory standards and procedures. EIOPA is also due to report in 2019 on the barriers to providing cross-border insurance in general. The Department of Finance and the CBI will feed into the development of this report to ensure that the existing market for insurance is improved as much as possible.
- In relation to motor insurance in particular, on 24 May 2018 the European Commission published a proposal for a revised Directive on Motor Insurance. The proposal covers a range of issues including the portability of claims history statements throughout the EU and guarantees towards victims in cases of insurer's insolvency. These issues are relevant to the work of the Cost of Insurance Working Group and I welcome the publication of the proposal.
Finally, an important point to note is that in considering whether to take on Irish risk business, an insurer 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 more accessible EU insurance market, there can be no guarantees that insurers in other jurisdictions will automatically be willing to take on Irish risk.
