Seán Sherlock (Cork East, Labour)
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I thank the Acting Chairman for the opportunity to discuss the issue of dual pricing. It is important that we acknowledge the work of our parliamentary colleague, Deputy Doherty, in respect of this issue. Had it not been for his foresight, I would not be here talking about it today and we would not be dealing with this as an issue.

We hear terms such as "price walking", "price signalling", "dual pricing" and "differential pricing" but it all amounts to the same thing, namely, how much more money can be squeezed and screwed out of the consumer. It permeates the insurance industry and it is self-evident. The Competition and Consumer Protection Commission, CCPC, is acknowledging it and the Central Bank is latently acknowledging it.

I welcome the Minister of State at the Department of Finance, Deputy Fleming, and I ask him what the Government's response to this will be, given that there is a programme for Government commitment on it. If the programme for Government is saying we need to ensure there is a level playing field for consumers on the price of car insurance, for instance, what is the solution and what solution is the Government offering? The Labour Party is of a mind to support the Sinn Féin Bill that is before the House because that is a solution to this issue.

The Central Bank's response to the issue of dual pricing does not leave one inspired and I refer to an article in The Irish Timeson 9 September, which references a senior official in the Central Bank. When this official was questioned about this issue, she advocated for a: "measured and proportional approach, based on actual tangible evidence". We have the tangible evidence. That has been self-evident since 2015 and 2016. The dogs in the street know about this. The official went on to state that the Central Bank was keen to avoid unintended consequences from any new regulations such as the stifling of competition, saying: "If you ban the practice, it might result in some industry firms exiting the market, reducing competition and choice for consumers". My analysis of that response by the Central Bank to this important issue is one that reminds me of how the Central Bank regulated the banks in the worst days prior to the recession. It seems to me to be signalling that there is almost a hands-off, conservative or light-touch approach to this issue and that does not augur well. We want the Central Bank, the Government and this Parliament to finally deal with this issue to ensure there is fairness on how people consume products within the insurance industry. We want to ensure that cartel-like behaviour is done away with once and for all and that Ireland follows the model of the UK on the issue of dual pricing.

The Minister of State before us has a stout record as an advocate for the consumer. I am hopeful that the Government will take this issue extremely seriously and that the Central Bank will not be conservative in its approach to this issue because everybody is watching it right now to see what way it will move on this issue. We have already had a signal from the CCPC on 17 September on anti-competitive co-operation or in other words, cartel-like behaviour and the consumer is demanding a response. We have crossed a Rubicon and we need an adequate response.

Seán Fleming (Laois-Offaly, Fianna Fail)
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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.

Seán Sherlock (Cork East, Labour)
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I accept the bona fides of the Minister of State but the response does not inspire me, to be honest. If the Central Bank was fulfilling its obligation as the "watchdog", it would already have the evidence. If the Competition and Consumer Protection Commission, CCPC, tell us it has investigated practices as far back as 2015 and 2016, what was the Central Bank doing in that period? There should already be a book of evidence on the matter.

I take the point that the Minister of State is making in respect of legislation but if a legislative proposal is brought before the House, we will look seriously at it and support it. Right now, people looking at this matter are demanding a robust response by the Central Bank, the Government and this Parliament.

The idea that lower introductory rates can be offered to new consumers of car insurance is not a competitive practice. It is not morally right if there is a penalty applied to a person who is loyal to a particular company. We know that is happening. It would not take a trawl through millions of pieces of data to get the required information as there are enough people in the insurance sector to yield it. There is enough of a body of evidence from consumers and the complaints they have made about this issue and the decisions made against insurance companies.

This comes down to the refusal to charge the same price for providing the same service to existing and new customers. It is really a form of pyramid scheme that makes sense only in the context of an exponentially expanding customer base. In other words, it makes absolutely no sense at all.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I understand completely Deputy Sherlock's statement and his impatience about particular actions being taken at this point. I have explained why we are taking this correct route. I would prefer to gather more information and base any legislative proposals on clear facts that we can stand over rather than jumping the fence too soon and not knowing what is on the other side.

I understand the Deputy's impatience with the Central Bank and note his remarks that the bank should have been wise to this matter and that it should not have had to work its way up through consumer complaints, Oireachtas committees and complaints heard when canvassing for the general election, which led to it being included in the programme for Government. I understand the Deputy's reasoning for saying the Central Bank should have been ahead of the curve on the matter.

The bank's work will engage not just in examination of computer records of insurance companies but directly with consumers. I do not know how it will do that; it may be a survey or contact with a sample of particular consumers that may feel they have suffered because of dual pricing in order to get direct feedback. It will be an important point. It will take some months to get to the bottom of this and we are only in government a matter of weeks.

What is dual pricing? For example, I might get an insurance quote of €500 for my comprehensive insurance but a person of the same age, in the same village or town, with the same car of the same horsepower and age, with the same number of penalty points may get charged €600. We must know why that happens. Sometimes the person who gets the €600 quote will write a cheque and send it in the post but another person may ring the insurance company and argue about why the price has increased. When the person indicates he or she will shop around, a lower price may be offered. It is not fair as companies are abusing people who may be seen as a soft touch. It is a practice we must stamp out.

We are with the Deputy on this and it is in the programme for Government. We want more specific evidence before passing legislation on the matter.