Linda Nelson Murray (Fine Gael)

I welcome the opportunity to raise this matter. Although the Minister of State, Deputy Troy, could not be here, I thank the Minister of State, Deputy Feighan, for coming to the House.

I was thinking about this whole insurance reform thing. People would know me as being an advocate for reform and would ask me how I was getting on because they had not seen a difference in their premiums. I always reassure people of the significant work already done on insurance reform, such as the personal injury guidelines, the Injuries Resolution Board and the development of the National Claims Information Database, NCID, and that is thanks to the past two Governments and Members of both Houses.

I also welcome the new action plan for insurance reform. It says:

Greater transparency is fundamental to delivering a fairer and more affordable insurance market.... This Action Plan commits to expanding transparency further, ensuring that policyholders understand how premiums are calculated, and that insurers operate in an environment of accountability.

That sounds fabulous. I welcome the proposal for a transparency code for motor insurance. The fact that this is one of the early actions - it is due to be delivered by the end of this year - shows that the Government understands how important it is that people can see what is driving their premiums. Greater transparency on insurance premiums could lead to a more competitive market, allowing consumers to better understand the factors that influence pricing. The results could be informed customers, increased competition, accountability, the identification of inefficiencies, and consumer advocacy. Overall, increased transparency could empower consumers and foster a healthier, more competitive insurance market, ultimately leading to reduced costs. Would that not be great?

The reason I have tabled this matter, though, is the current experience of motorists and small businesses. The most recent NCID report and what we all hear in our constituencies tell the same story: motor insurance premiums are rising again. Let us stop telling people that they are down since 2016 because they are actually back up. Motorists, families, tradespeople and community organisations are all being squeezed. People are asking a very reasonable question, that being, why their premiums are still going up after all the reforms. The transparency code has real potential to help answer that question. My concern is simply to ensure that we design this code in a way that genuinely delivers for policyholders.For this policy to truly work I believe we need clarity in a small number of key areas before the code is finalised. First, we need to know the purpose of the transparency code. Why are we doing it? Is it there to help consumers understand how their premiums are calculated or is it also intended to help ensure that savings from reforms are passed to policyholders? What is the primary objective of the code - transparency alone or transparency in the service of lower and fairer premiums?

Second, it must be meaningful. That means information insurers provide under the code should not be limited to generic statements about market conditions, claims, inflation and blah, blah, blah. It should give policyholders a simple breakdown of the main elements underpinning their premiums, for example: the claims cost; their no claims discount; reinsurance; operating and legal costs; commissions to all parties, whether that be the broker, the underwriter, the insurer or the reinsurer; an indiction of the profit element at line of business level; Government taxes; the level of excess that is selected; and the individual risk assessment. Another thing is that those paying their premium monthly instead of all in go actually pay more. Put all of that down. It should also explain in plain language the main reasons for changes since the previous year, including where reforms or other developments have reduced costs, not only where costs have gone up.

Third, transparency needs to be standardised and verifiable. I am aware officials from the Department of Finance, the Central Bank and the industry are already working together on the design of the code. That collaboration is welcome but for the code to be useful I believe work should deliver a format in plain language so that explanations from different insurers are easy to read for everybody, no matter what age they are. I also think it is really important that public representatives and organisations representing consumers have an opportunity to input into the code and they have not had that so far. The action plan speaks about the Department working with the industry to develop the code and I do welcome that. However, it is not yet clear whether the end result will be like a voluntary industry code or a binding requirement backed by regulation or by the Central Bank's supervisory powers.

Finally, it is important we do something so that the transparency code does not become a way to show policyholders why they are paying more. That would be an awful result of this work. I sit on the enterprise committee and over the past few months we have had representatives from Retail Excellence, RGDATA, the Irish Hotels Federation, a chamber of commerce and the Vintner's Federation of Ireland all saying the costs of insurance are still way too high and there is not enough competition in the market. I look forward to working constructively with the Minister and colleagues across this House as the code is finalised.