Thursday, 23 June 2016
9. To ask the Minister for Finance the steps he will take to ensure that returned emigrants and immigrants are not discriminated against in the provision of car insurance; and if he will make a statement on the matter. [17511/16]
I thank the Ceann Comhairle for his flexibility in allowing me to take Deputy Martin Kenny's question. The question relates to the cost of car insurance, an issue we have been debating in the House for some time. The question is specifically about returned emigrants. The Minister will have heard that many people are thinking of returning home, and it is great to have them return home, but they are being completely fleeced by the insurance industry because they have lost their no-claims bonus. Despite the fact that they might have been driving in this country for ten years claim-free, if they are gone for two years and have have not driven in another jurisdiction they lose their no-claims bonus and they are faced with massive increases in their insurance premiums, with quotes as high as €5,000. Does the Minister plan to take action to encourage and allow such emigrants to come home and drive safely on the roads?
As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation but I am prohibited from interfering in the provision or pricing of insurance products. The provision of insurance cover and the price at which it is offered, including the granting of no-claims discounts, is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. The risks are considered by insurance companies on a case-by-case basis. The costs and risks of providing motor insurance cover can vary between different countries.
Insurance Ireland has informed me that, in general terms, where there has been no motor insurance in an individual's name and there is a gap in cover of two years or more since his or her last insurance, the no-claims discount is deemed invalid. However, Insurance Ireland has further stated that if the individual can produce confirmation that he or she was continuously insured and remained claim-free in his or her own name while away, that will be taken into consideration.
My Department has embarked on a review of policy in the insurance sector which is being undertaken in consultation with the Central Bank and other Departments and agencies. 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 is focused on the motor insurance compensation framework, and this work is nearing completion. The next phase of the review involves examining the factors contributing to the increasing cost of insurance and identifying what short-term measures could be introduced to help reduce the cost of insurance for consumers and businesses, and also what initiatives need to be undertaken over the longer term. The work will include an examination of the issues affecting returning emigrants and immigrants and will continue over the coming months.
I might add that Insurance Ireland operates a free insurance information service for those who have been unable to obtain a quotation for motor insurance or feel that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance. Such people should contact Insurance Ireland directly.
The Minister has suggested that it will take a couple of months to complete the review. We need action to be taken by the insurance industry sooner than the time it will take to produce the report in a couple of months. People who want to come home are not coming home because of high motor insurance costs. The Minister said that if they are driving abroad then they can show they have a no-claims history. People from my constituency had to emigrate because of the crash and the financial crisis. They went to Sydney, Perth and London. Many of them are working in the tunnels. Those who are living in London do not need a car because they are not driving, and they will have lost their no-claims bonus even though they have been driving on the roads of Donegal and elsewhere for the past ten years. Although they have a safe record they are being charged €5,500 per year because they are considered to be among the riskiest drivers.
I tabled an amendment to the motion that was passed in the House seeking that the report be released as soon as it was completed. Could the Minister tell us whether the report of the review - or the task force, as the Minister is now calling it - will be made available to the House as soon as it is available?
The first phase of the review, or the task force, as Deputy Doherty referred to it, is on Setanta Insurance, with which the Deputy is familiar and on which he asked a number of questions. In a week or two the task force will proceed to examine insurance in general and it will start with motor insurance. Yes, I will publish the report.
The Minister is aware that the amended motion called for the report to be published straight away, and I welcome the fact that the Minister has committed to do that because in previous replies on the matter he was ambiguous on that issue. We also called for the establishment of a task force to review the Central Bank's role on the regulation of the insurance industry and a number of other issues. Could the Minister outline progress in that regard and his intention to fulfil the will of this House, expressed by means of the acceptance of the amendment? Could he also inform us of the timeframe of the review group? It will begin to look at motor insurance issues in a couple of weeks. When does he expect that aspect of the review will be concluded? That is the really burning question. We are all aware that Setanta Insurance is a factor, but the bigger issue is when steps will be taken by the Government to help people, including returning emigrants, with regard to the significant increase in premiums. The work is due to begin only in two weeks' time. When, in the Minister's view, will it conclude and when will we see the recommendations?
The task force was in place for some months before the motion was debated in the Dáil. First, it was asked to deal with the issues arising from the crash of Setanta Insurance and the consequences of that. I had hoped to have the report in that regard before the summer recess, and I will publish it. After that, the task force will move on to other issues arising from insurance, prioritising motor insurance, and I assume that will take some months, but beyond that I cannot give the Deputy a finer timeline.