Frank O'Rourke (Kildare North, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

27. To ask the Minister for Finance the measures he is proposing in order to bring about a reduction in car insurance premiums; the timeline for the implementation of such measures; and if he will make a statement on the matter. [30014/16]

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

I am aware of the increasing cost of motor insurance and am very concerned about it.  However, the ability of the Government to influence pricing is limited as insurance companies are required under European law to price in accordance with risk and 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.  In addition, I have to be conscious of the need for a stable insurance sector and that risks to policyholders and to the wider financial system are kept as limited as possible.

However, 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. Consequently,

I have established a Cost of Insurance Working Group chaired by Minister of State Eoghan Murphy T.D. This Working Group consists of a number of relevant Government Departments, the Central Bank of Ireland, the Personal Injuries Assessment Board and the State Claims Agency.  The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.

The core areas to be examined by the Working Group in the first phase are:

- The motor insurance sector generally, at present and in recent years;

- The effects of legal costs and litigation processes on insurance costs;

- The current claims compensation arrangements and the cost of claims;

- Insurance data and information;

- The impact of accident rates;

- The impact of unlawful activity on the insurance sector; and

- Other market issues.

Because the issue of the cost of insurance is complex and in order to get to the heart of these issues as soon as possible, Minister of State Eoghan Murphy T.D. has established four sub-groups to review them in detail. Chairs have been appointed to these sub-groups and work has already commenced. The sub-groups are meeting weekly and their outputs will feed into the meetings of the Working Group. The Working Group has held five meetings to date and will continue to meet every two to three weeks to the end of 2016.

The consultation process has commenced. Minister of State Murphy has had informal meetings with representatives from a number of key stakeholders including: Insurance Ireland, AA Ireland, the Injuries Board, the Irish Brokers Association, IBEC, FBD Insurance, and the Central Bank of Ireland. The Working Group and the four sub-groups are also meeting with the relevant stakeholders. The Working Group has met with representatives from the Law Society, AA Ireland, the Irish Brokers Association, the Irish Car Rental Council, the Irish Road Haulage Association and the Consumers Association of Ireland. Further consultations will be arranged. In addition, submissions received from all interested parties will be considered as part of the process.

By the end of October, the Working Group will provide me with an update report which will set out the priority actions required. 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.