I understand that the Deputy is referring to the regulation of motor insurers in Ireland, in particular regarding the way that they conduct business and make decisions regarding consumers.
At the outset, it is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation in Ireland, including the regulatory environment for life and non-life insurance. This responsibility includes the negotiation of the relevant EU framework of Directives and Regulations, and their transposition into Irish law, including the Solvency II Directive and the Insurance Distributors Directive. I, as Minister, have no role in day to day supervision of the insurance industry, as this is the responsibility of the Central Bank of Ireland (CBI). Having said that, my Department monitors and advises on issues that arise with regard to the provision of insurance, including motor insurance, and the work of the Cost of Insurance Working Group (CIWG) has been feeding into a number of important reforms for consumers in this regard, as the Deputy will be aware.
With regard to the day to day supervision of motor insurance companies, the CBI is responsible for the authorisation and supervision of these undertakings in Ireland. The CBI has two specific mandates as regards insurance supervision. First, it is responsible for the prudential supervision of insurance companies authorised by the CBI. Second, it is responsible for the supervision of conduct of business in Ireland, also referred to as consumer protection. The CBI, like all European supervisory authorities, is explicitly prohibited from playing any role in the setting of premiums. It states therefore, that it does not have a role in relation to pricing considerations or competitiveness of the Irish insurance industry. It also states that provided firms treat customers fairly, the price of policies is a commercial decision for each insurance firm.
I am also advised that all motor insurance companies operating in Ireland, whether authorised by the Central Bank or a competent authority of another EU state, are subject to conduct of business supervision by the Central Bank of Ireland. They must follow the Central Bank’s Consumer Protection Code 2012 (CPC). The Central Bank has advised that the CPC provides that a regulated entity must act honestly, fairly and professionally in the best interests of its customers and the integrity of the market, and must make full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer. A regulated entity must ensure that all information it provides to a consumer is clear, accurate, up to date, and written in plain English. Key information must be brought to the attention of the consumer, and the method of presentation must not disguise, diminish or obscure important information. The Central Bank expects that companies’ practices are compliant with these principles and requirements. This is relevant to there being an adequate procedure in place to protect consumers against being treated unfairly.
In addition, there are also measures in the CBI's 2012 CPC that require all regulated financial services firms to have complaints handling procedures in place. With regard to the practices mentioned by the Deputy in the question, if, a person feels that they have been unfairly treated by an insurance company, and after following the firm’s complaints process, they are still not satisfied, they have the right to refer the complaint to the Financial Services and Pensions Ombudsman (FSPO). This is a statutory independent body that mediates unresolved disputes/complaints with regulated financial services providers. The Central Bank does not investigate individual consumer complaints.
Finally, with respect to empowering motor insurance consumers, I think it is important to also reference new measures introduced by the CBI on 1 November. These arose from recommendations of the Cost of Insurance Working Group. These are designed to increase consumer engagement and pricing transparency, and are as follows:
- For private motor insurance renewals, insurers will be required to provide the amount of the insurance premium paid in the previous year or, where any mid-term adjustments were made to the policy during the year, an annualised premium figure;
- Insurers will be required to provide the total premium for each policy option available for the customer in the renewal notices/quotations (i.e., comprehensive; third party, fire and theft cover; third party only, if offered by the insurer; and,
- The renewal notification period will be extended from 15 working days to 20 working days for all non-life insurance policies.
I believe that each of these measures should assist consumers in making decisions at renewal time, including encouraging them to shop around and, if favourable to them, switch insurance provider.
