Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputy for raising this issue today. He will know that both the Minister, Deputy Donohoe, and I have stated publicly that the insurance industry needs to treat its customers fairly and in line with the Central Bank consumer protection code. The same applies in relation to any practices in pricing that are not fair to its customers. Not only does it have to be fair but it has to be transparent as well.

The former Minister of State, Deputy Sherlock, has asked what the proposal is for dealing with this matter. I hope the Deputy understands me when I say the programme for Government includes a specific commitment to work to remove dual pricing from the market and a proposal will be brought to Government to commence and implement that proposal as soon as practicable. This issue has been hanging out there for quite some time and it was raised by all parties in the run-up to the general election. That is why it is specifically itemised in the programme for Government so it is an issue of concern to everybody here.

Dual pricing, also known as differential pricing, is the practice of quoting two different prices to different customers for the same product or service, even where those customers have the same risk profile and cost of service. This is also an issue in the UK, where the UK's Financial Conduct Authority has been undertaking a review, which was completed in recent days. However, I stress that just because something is happening in the UK does not mean the same practice is happening here and it would not be appropriate for us to just copy what is being implemented in the UK without detailed examination because each market has its own particular criteria and it is important that they are looked at.

Late last year, the Central Bank of Ireland announced that it would carry out a study into the practice of dual pricing. I thank the members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach of the last Dáil, which had the various insurance companies before the committee and they denied the existence of this practice. As a first step, the Central Bank commenced a review and contacted and interviewed various people in the major companies involved.

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There are fewer than 20 of those companies. They established that the practice is happening and some of the boards of directors in some of these companies were not aware of what was happening in those companies. No information was yielded with regard to the extent of the practice, the number of customers affected and the possible extra income raised by the companies because of the practice.

We must establish all of this information and what I would call phase one of the work has been done. It has been established that the practice exists and the chief executive officers of each of those companies have been written to asking for detailed proposals on how to deal with the matter. They have also been asked to bring the issue to their boards of directors, which did not always happen, and to co-operate with further investigation of the Central Bank.

The Central Bank is moving to phase two of its investigation, which is a quantitative analysis. It will trawl through millions of computer records relating to motor insurance as it is the biggest end of the market in Ireland. There are millions of policies out there so the investigators will be able to check what happened in the past number of years through computer profiling. When the investigators have specific information on the extent of the problem and which companies are operating the different practices, they will issue findings and recommendations at that stage.

I know some people believe we should pass legislation on this because we know there is a problem. I would like to know the extent of the problem, where it occurs and why it happens before moving to commit to legislation. It will take a little time to get more information from the Central Bank but at that point we will be in the position to take definite action.

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