Eoghan Murphy (Dublin Bay South, Fine Gael)
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81. To ask the Minister for Finance his views on correspondence (details supplied) regarding insurance premiums. [12460/16]

Michael Noonan (Limerick City, Fine Gael)
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As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  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 and neither I, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing or the provision of insurance products.

Insurance companies consider a number of risks when determining the premium for a proposed insurance policy and the premium will take account of the actuarial calculation of risk.

Insurance Ireland has informed me that motor insurers in deciding on whether to offer cover and what terms to apply to cover use a combination of rating factors, such as the age of the driver, the type of car, claims record, driving experience, number of drivers, how the car is used, etc. Insurers do not all use the same combination of rating factors, prices vary across the market, and consumers are free to choose.

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. I have asked my officials to examine the factors which contribute to increasing the cost of insurance. 

This work is part of an overall review of policy in the insurance sector which my Department is carrying out in consultation with the Central Bank and other Departments, Agencies and external stakeholders.  The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector. The Review of Policy in the Insurance Sector will continue over the coming months and is expected to be completed by the end of this year.