Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

As I said, the Department is conducting a review at present and will consult with various interest groups, both public and private. Certainly there are issues that need to be addressed but under European law insurance companies must cover risk and must price in accordance with risk. If the risk is high, obviously premiums go up. Neither the Central Bank nor the Department of Finance can intervene to direct or influence the pricing policy of insurance companies.

I am informed by both the insurance industry and the Central Bank that the frequency of claims has increased over the past year. This is associated with improving economic conditions. They also state that the number of large claims has increased. The Central Bank further states that a number of changes taking place within the claims environment in Ireland are making that environment volatile. This in turn increases the claims costs for insurance. The changes mentioned include the changes in the courts' jurisdiction since February 2014 which has led to concerns in the sector that this will lead to increased legal costs. Furthermore, claimants are now more likely to engage a solicitor to handle claims and insurers report that this has led to cases taking longer to settle and has increased the cost per claim. There are also proposals to introduce periodic payments orders. There are changes happening in the sector so it is timely that we would conduct a review, led by the Department of Finance. While I am not re-instating the Motor Insurance Advisory Board, we will see what recommendations come out from the departmental review which should be concluded in a matter of months.

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