Shane Ross (Independent)

I welcome the Competition Authority's report but following on from the last three speakers' contributions I am somewhat out of sync with the views of the House. Senator Coghlan and Senator Leyden gave a robust defence of insurance brokers. Although they congratulate the Competition Authority, I am not sure what they said is in line with the report's message.

The Competition Authority has done a worthy and adequate job in highlighting the position of insurance brokers and the difficulties for them and consumers. It is due to give a fuller and final report on this issue in the forthcoming weeks. However, in light of the comments from the Minister of State and Senator Leyden and Senator Coghlan, the Competition Authority should not become a fig-leaf for the Government. I am concerned that when the Competition Authority, having thrown questions into the public arena, makes its recommendations on insurance brokers, it will be ignored because of strong political lobbying in this House and the Lower House.

Insurance brokers are a strong political lobby. In the past, they were even stronger as a large number of Members of both House came from the profession, making it a difficult task to tackle them head-on. The Competition Authority, so far, has not done that but hopefully it will do so in its final report. Let us hope that the Government does not listen to many of its backbenchers but to the report it commissioned and acts accordingly. This particular body must not be allowed to be a fig-leaf for the Government. It must not be a wastepaper basket where problems go and come out diluted. It must be allowed to be proactive and its recommendations responded to with vigour by the Government.

I noted the tactic of the last speakers when they rightly deflected much of the flak from the brokers and onto the large insurance companies. The large insurance companies are running a semi-cartel. They have behaved in a bullying fashion to the consumer for many years and have had it all their own way. It is an industry that behaves in a less moral way than the banks. However, if it is doing so, who is assisting it?

The report found that 80% of motor insurance went through insurance brokers, with an even higher percentage for liability insurance. If the large insurance companies are guilty of overcharging, they are assisted in this abuse of the consumer by insurance brokers. We cannot have it both ways. This is an industry and they are all in it together. The suspicion is that it is a conspiracy against consumers, as it is no accident that they are being overcharged by the insurance industry. There is a conspiracy, an understanding, a tick-tacking between the insurance companies and brokers at the expense of the consumer. I must be living in a different world from Senators Coghlan and Senator Leyden because the evidence tells me that this is what is specifically happening in the insurance industry. Every time I investigate an individual case of insurance abuse or malpractice, I find that the consumer is being hood-winked one way or the other, either by the broker, the company or both. This is from my experience of the industry and it is invariably true.

I understand the argument made by Senator Leyden and Senator Coghlan. However, is there any need for insurance brokers at all? Can we do without them? This is the fundamental question which the Competition Authority did not address. Senator O'Rourke last week told the House that she had telephoned various companies when renewing her car insurance. By doing so on her own, she managed to reduce her premium by €200. Do insurance brokers do this? Consumer inertia is the greatest benefit for the financial services industry. The average man on the street does not switch banks or insurance companies because it is too difficult with paperwork obstacles in the way. Part of the agreement between the brokers and the insurance companies is to make it difficult for the average man to switch, forcing him to stick with them and they can continue overcharging him. Anyone who has taken the trouble to shop around for their motor, house or employer's liability insurance will find a better deal than an insurance broker. It is an industry that lives on the inertia and sloth of the consumer.

The most tangible item in the report concerns the commissions from which brokers earn their money. A simple question must be asked. Why in God's name do brokers not put the commission charged on every bill sent to a customer? I was a stockbroker once and, by God, they are parasites. Not so long ago, I was a parasite.