Imelda Munster (Louth, Sinn Fein) | Oireachtas source

I welcome the Bill which has been a long time coming. In the case of Setanta customers, it has been more than four years. It is simply unacceptable that private insurance companies in this State can become insolvent without their customers being protected. I commend the work of my colleagues, particularly Deputy Pearse Doherty and others, on pushing for this Bill to ensure customers are treated fairly when these companies fail. It is only right that they are compensated in full and that customers in future can be confident that they will be protected should another insurance company fold.

The legislation to establish the motor insurance insolvency compensation fund is therefore a welcome development. The Government operates a system of mandatory motor insurance, which is only right, but it leaves the regulation of that sector to the market, meaning that the State opts out. For-profit companies are left to operate as they see fit, which inevitably has led to the utterly dysfunctional market we know.

Every other week my office receives calls from motorists who are unable to insure their vehicles due to the outrageous rip-off quotations received from insurance companies. Many people, especially those in rural areas cannot go about their daily lives without the use of a car. As we well know, public transport is lacking and they have no choice. Others drive for a living or need to drive as part of their jobs. We know that premium quotes are outrageously high for some, especially those with cars older than ten years. Insurance companies like to claim that this is because of fraud, which is the fault of drivers. While, of course, we know fraud is a problem, it is not the cause of a dysfunctional insurance market.

The market is as it is because the sector was not regulated in a proper fashion. When it came under pressure during the recession the companies hiked up the cost to cover themselves. That is the fault of the companies and the market. It is also the fault of the Government for washing its hands of this issue. While I welcome the Bill, I would like the Government to examine other issues in the insurance sector. The current system is grossly unfair and is causing great hardship for thousands of people.

See this speech in context