James Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

81. To ask the Minister for Finance to outline the steps he is taking to reduce the increasing insurance costs for farmers for buildings and machinery; and if he will make a statement on the matter. [29485/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing of insurance products. The EU framework for insurance expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.

The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and the need to provide for adequate provisioning to meet those risks.  These are considered by insurance companies on a case by case basis.

My Department has embarked on a review of policy in the insurance sector which is being undertaken in consultation with the Central Bank and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.

As part of that Review, I have established the Cost of Insurance Working Group, chaired by the Minister of State Eoghan Murphy T.D.  This Working Group is examining the factors contributing to the increasing cost of insurance and identifying what short-term measures can be introduced to help reduce the cost of insurance for consumers and businesses.  The Working Group, which is focussing initially on the issues of rising motor insurance premiums, is due to provide me with an initial set of recommendations at the end of this month. From November to December, the Working Group will then develop an action plan to enable the relevant Government Departments and Offices to commence the implementation of these priority actions. It is my view that the implementation of the action plan  will also have an impact on other areas of  non-life insurance.

However, it should be noted that I have not ruled out the possibility of the existing Cost of Insurance Working Group looking at other non-life insurance sectors, if it is clear that there are separate and distinct issues which need particular examination in order to improve the functioning and regulation of these parts of the market.