Dáil Éireann Debate, Tuesday - 15 January 2019
254. Deputy Kevin O'Keeffe asked the Minister for Finance his views on future motor insurance premiums charged for learner drivers, be they owners or users, in view of the recent amendments to the Road Traffic Acts; and if he will impress upon the insurance companies the need for a reduction on these premiums. [1667/19]
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 can interfere in the pricing of insurance products, as this is a matter of a commercial nature, and determined by insurance companies based on an assessment of the risks they are willing to accept. These are considered by insurance companies on a case-by-case basis. 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.
I understand that 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 those such as the age of the driver and the relevant driving experience, as well as the age and type of vehicle, how the vehicle is used, the claims record, and the number of drivers. Insurers do not all use the same combination of rating factors, and as a result prices vary across the market. In addition, insurance companies also price in accordance with their own past claims experience.
Regarding recent changes to legislation relating to learner drivers, my officials contacted their counterparts in the Department of Transport, Tourism and Sport and were informed that it would be presumed that this would refer to two specific measures included in the Road Traffic (Amendment) Act 2018 which was commenced before Christmas. The first is a provision to hold accountable owners of vehicles who allow unaccompanied learners to drive their vehicles. The second extends the existing Garda power to detain vehicles in certain circumstances by adding the circumstance whereby the driver is an unaccompanied learner.
The Department of Transport, Tourism and Sport emphasises that the new measures are intended to increase Garda enforcement powers in this area and act as a deterrent to the highly dangerous practice of learners driving unaccompanied and, as such, should make Irish roads safer. However, it is unclear how these changes will impact upon the cost of motor insurance for learner drivers on a broad level, if at all, as since 2007 it has already been illegal for a learner to drive unaccompanied.
More generally, the Deputy should note that the Cost of Insurance Working Group will continue to focus on putting into place the measures proposed in its Report on the Cost of Motor Insurance . It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, should achieve the objective of delivering fairer premiums for all consumers, including learner drivers.
In this regard, it should be acknowledged that the most recent Central Statistics Office data (for November 2018) indicates that private motor insurance premiums have decreased by 22.7% 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 it is appreciated that many people may still be seeing increases. However, it is hoped that the improved stability in pricing will be maintained and that motor insurance premiums should continue to fall from the very high levels of mid-2016.
