Mr. Conor Faughnan:

There is a mechanism under the declined cases agreement. It is a legal obligation to have insurance and if an insurance company declines people, they can get a letter stating they have been declined. An artificially high quote can be considered tantamount to refusal to quote. There are mechanism to correct this, but evidently the insurance company does not want the business. This comes to us a lot in our engagement with AA members and motorists and, very often, with the sons and daughters of AA members and motorists. We are regularly asked how it can be just because people's circumstances have not changed, they continue to have no penalty points or claims, they drive the same car and are in the same occupation so why has their price increased by 30%. The answer is not particularly pleasant but there is some validity to it. Insurance is a pool of money. Everybody pays into the pool so that when anybody needs to draw out of the pool, the money is there. If the money being drawn out of the pool increases because there are more claims, claims have become more expensive, legal costs have increased or there must be insurance against the failures of others, it means more money is drawn out of the pool. If more money is drawn out of the pool then innocent participants, whose circumstances have not changed at all, will still have to pay more. This is just nature of how insurance works. This is why the recent price rises are being felt not only by individual groupings, but by 2 million Irish motorists.

In terms of scale of the damage, if we consider that 2 million Irish motorists pay premiums at present and if, typically, individuals report their price has increased by €300, and there will be some cases where it is significantly worse and others who will feel as though they are getting away with it, but if we conservatively state it is €300 per motorist this amounts to €600 million per annum, which is an astonishing amount of money. Let us think about what could be done with this money if it were all put in one spot. It is extraordinary. To me this is the size of the prize. This is what can be fixed. We published reform proposals last November and we are still banging on about them. Last week, I discussed them with the Minister of State, Deputy Murphy. Even if the reforms were carried through we may still wind up paying more for insurance than we did three years ago, and we may still grumble about it, but at least all we would be paying for is insurance and not insurance plus fraud plus waste plus lawyers plus a failure to modernise and everything we are paying for at present.