Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank the Deputy for raising this important issue. The Minister for Finance has responsibility for the development of the legal framework governing financial regulation. Neither the Minister for Finance nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products as these matters are of a commercial nature and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits member states from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, the Minister is not in a position to direct insurance companies on the pricing level they should apply to particular categories of individuals. However, the Government accepts it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the cost of insurance. Consequently, the Minister established the cost of insurance working group in July 2016 and appointed me as chair.

The need for action was recognised by Government and accordingly the working group comprises representation from across Government, including the Department of Finance, the Department of Jobs, Enterprise and Innovation, the Department of Transport, Tourism and Sport, the Department of Justice and Equality, the Personal Injuries Assessment Board, the Central Bank and the State Claims Agency. The working group consulted widely and published its report on the cost of motor insurance in January 2017. The report targets six main objectives including that of protecting the consumer. This objective in particular relates to protecting the consumer in the insurance purchasing process. Important issues in this regard include increasing levels of transparency in respect of premiums, improving access to insurance and enhancing the quality of engagement with consumers. Across the six objectives, the report contains 33 recommendations and 71 actions which are detailed in an action plan contained in the report with agreed timelines for implementation. The Department of Finance is taking the lead in co-ordinating the overall implementation of the plan and the first quarterly update on the implementation of the recommendations was published this afternoon on the Department’s website.

I have already provided a preliminary update to the Committee on Finance, Public Expenditure and Reform, and Taoiseach. Action is happening across a number of fronts as per the report’s action plan. There is no simple or single solution to the problem of increasing insurance prices which was recognised by the committee’s report on the matter last year. It is envisaged the implementation of all the recommendations with the appropriate levels of commitment and co-operation from all relevant stakeholders should achieve the objective of delivering fairer premiums for consumers. This in turn should lead to greater stability in the pricing of motor insurance and help prevent the volatility we have seen in the market in the past. It should also better facilitate potential new entrants to the market. The latest data from the Central Statistics Office indicate there has been no month-on-month increase in the cost of motor insurance during the first three months of this year. The trend shows that since summer 2016, there has been a decrease in the consumer price index of the cost of motor insurance. If this trend continues, I am hopeful it might signal the start of a stabilisation of pricing in the market as the actions continue to be implemented over the next 18 months.

In so far as additional competition into the market is concerned, the Central Bank has announced recently that applications for new insurance entities into the Irish market have been made to the Central Bank and other applications are imminent. In so far as employer liability insurance and public liability insurance are concerned the working group is now in its second phase of work and we are looking at those issues. The working groups is engaging with industry stakeholders to see what additional measures might be introduced in addition to the measures that were announced in the action plan for motor insurance earlier this year.

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