Pearse Doherty (Donegal, Sinn Fein)
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I raised this matter because the Dáil, including the Minister of State, agreed that we needed to examine regulation of the sector. That includes how the Central Bank handled the issue. To clarify, the Central Bank did not tell me this. Rather, it told the Minister of State's boss, the Minister, Deputy Noonan, in a letter dated 18 August 2015.

If the Minister has not informed the Minister of State to whom he has given responsibility in this area that the Central bank has written to him and said that there was an imprudent pricing and underwriting approach taken by the insurance companies, then that is an issue the Minister of State needs to clear up with the Minister for Finance. This is correspondence between the Minister and the Central Bank that I received through a Freedom of Information, FOI, request. The question I have is crucially important and one that cannot be brushed under the carpet. There may be a very legitimate reason for the Central Bank's actions but it is important that the working group, chaired by the Minister of State, would deal with all of these issues.

A further extract from the document asserts that "Irish general insurance companies have eroded their capital base". The next part of the document is blacked out and I assume it contained information on the capital base of the companies. The document goes on to say the following: "You will have noticed as well that these companies have put in place, at their helm, new CEOs, to effect this return to profitability". That is what is at the core of this. The nub of the issue is that these companies eroded their capital base, as the former Governor of the Central Bank, Professor Honohan outlined to the Minister for Finance in August. They did this because they lost €100 million on investments over two years. They employed new CEOs, almost across the board, to increase their profitability, as the former Governor pointed out. They have increased their profitability by increasing premiums by approximately 50% in the last two years. In some cases, the increases have been in the order of 100% to 200%. They have made several excuses such as whiplash claims and so forth but the core of the matter is something else entirely. If that is the reason, that is okay and we need to deal with that.

It is crucially important that we ensure that this does not happen again in the future. If the Central Bank was of the view that the insurance companies were taking an imprudent approach to pricing and underwriting what steps, if any, could it have taken to prevent that from happening? If it could have taken steps to address this, why did it not do so? This is crucial.