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

We are all aware of the rising cost of insurance, particularly motor insurance, and will recall that the House allocated three hours to debate the matter on 20 April. I have noted the widespread concern across the House about insurance costs and noted the Dáíl statements made on that day. The ability of the Government to influence insurance practices and pricing is limited as insurance companies are required under European law to price in accordance with risk. Neither I, as Minister for Finance, nor the Central Bank of Ireland has the power to direct insurance companies on the pricing or provision of insurance products. However, that does not preclude the Government from introducing measures that may in the longer term lead to a better claims environment that would facilitate a reduction in claim costs.

The cost of insurance is a complex issue involving a number of parties, including Departments, State bodies and private sector organisations. My Department's review of policy in the insurance sector is being undertaken in consultation with the Central Bank of Ireland and other Departments and agencies and external stakeholders. The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector. The first phase of the review deals with the motor insurance compensation framework and this work is nearing completion. The next phase will deal directly with the issue of insurance costs and include an examination of the factors which contribute to the current rise in insurance premiums. The availability of relevant and timely data for the insurance sector to facilitate an in-depth analysis of the issues is also a matter to be addressed as the current lack of data presents difficulties from a policy analysis and development perspective.

The review of policy in the insurance sector will continue in the coming months and is expected to be completed by the end of the year. The final report will be presented to the Government in due course.

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