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Insurance Industry Regulation

Dáil Éireann Debate, Tuesday - 12 June 2018

Tuesday, 12 June 2018

Ceisteanna (228)

Michael McGrath

Ceist:

228. Deputy Michael McGrath asked the Minister for Finance his views on insurance companies charging extra to HSE first responders; if there is a regulatory prohibition of such a practice; if there are tax incentives or reliefs for first responders for the role they play; and if he will make a statement on the matter. [25035/18]

Amharc ar fhreagra

Freagraí scríofa

I am disappointed that some insurance companies are continuing to apply an additional charge to volunteer cardiac first responders who are providing such a valuable community service. However, it is important to note that as 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 or conditions that they should apply in respect of particular categories of drivers or vehicles, including HSE first responders.

In making their individual decisions on whether to offer cover and what terms to apply, insurers will use a combination of rating factors, which include how the vehicle is used, as well as the age and type of the vehicle, the age of the driver, the relevant claims record and driving experience, and the number of drivers. 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 particular categories, different insurance companies will have different views.

However, it is acknowledged that pricing in the motor insurance sector has been subject to a lot of volatility in recent years with a related problem, being the availability of cover in the first place. These issues were the main impetus for the establishment of the Cost of Insurance Working Group. Its Report on the Cost of Motor Insurance was published in January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out within an Action Plan.

Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The fifth such update was published on 11 May and shows that of the 50 separate deadlines set to date within the Action Plan, 40 have been met. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. Both the Report and the quarterly updates are available on the Department’s website, within “The Cost of Insurance Working Group” sub-section of the main “Insurance” section.

It should be noted that the most recent CSO data (for May 2018) indicates that private motor insurance premiums have decreased by 19% since peaking in July 2016. While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore I appreciate many people may still be seeing increases. However, I am hopeful that the improved stability in pricing will be maintained and that premiums should continue to fall from the very high levels of mid-2016. In addition, with the full implementation of the Motor Report, I believe that Ireland will be more attractive to new entrants thus increasing capacity as well as competition which should have a positive impact in the pricing of motor insurance for certain categories of drivers such as cardiac first responders.

With regard to tax incentives or reliefs, there is no specific measure or relief targeted at HSE first-responders. However, if a paramedic employed by the HSE is obliged to incur an expense that is wholly and exclusively for the purpose of his or her employment, and not reimbursed by his or her employer, a deduction may be available under section 114 of the Taxes Consolidation Act 1997. Section 114 provides for a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment.

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