Written answers

Tuesday, 17 May 2016

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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171. To ask the Minister for Finance the steps he is taking to deal with the prohibitively high increases in insurance premiums for small businesses and individual drivers; if the increases in premiums demanded impact on the viability of businesses or the ability of persons to stay in employment and are a threat to the stability of the economy and, in turn, to the ability of the insurance industry to remain viable; to assist persons who cannot afford the increases being demanded; and if he will make a statement on the matter. [9419/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As Minister for Finance, I am concerned that there should be a stable insurance sector and that risks to policyholders and to the wider financial system are limited. 

I am aware of reports on the increasing cost of motor insurance but, the ability of the Government to influence insurance pricing is limited as insurance companies are required under European law to price in accordance with risk.  Neither I, as Minister for Finance, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing of insurance products. 

I have consulted with the Central Bank on this issue and I am advised by the Central Bank that recent premium increases should contribute to restoring core underwriting profitability and securing the financial position of the firms concerned for the longer term.

While the provision and the pricing of insurance policies is a commercial matter for insurance companies, this does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.

The question of the cost of insurance is a complex one involving a number of Government Departments, State Bodies and private sector organisations. 

My Department has commenced a Review of Policy in the Insurance Sector. This is being undertaken in consultation with the Central Bank, Departments and Agencies and other relevant stakeholders.  The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector. 

This Review will include an examination of the factors contributing to the cost of insurance and will address how insurance costs affect all aspects of the economy, including individuals and small businesses.

Work on the Review will continue over the coming months. It is expected to be completed by the end of this year and the final report will be presented to Government in due course.

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