Written answers

Wednesday, 23 November 2016

Department of Finance

Motor Insurance Regulation

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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78. To ask the Minister for Finance if his Department, or a body under its aegis, has considered any proposals for improving pricing transparency for motor insurance; and his views on whether the opacity of pricing in the sector has a negative impact on the cost of motor insurance for households. [36476/16]

Photo of Michael NoonanMichael 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. Neither I nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which 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. 

However, it is possible for the State to play a role in helping to stabilise the market and influence factors which contribute to the cost of insurance. Consequently, I established the Cost of Insurance Working Group and appointed Minister of State Eoghan Murphy as Chair.  The initial focus of the Working Group is on the factors that are contributing to the cost and availability of motor insurance and identifying what short-term, medium-term and long-term measures can be introduced to help consumers and businesses.  A broad range of issues affecting the cost and availability of motor insurance are being examined by the Working Group, including the issue of transparency of pricing in the insurance industry. In my view, transparency of pricing is an important issue in any marketplace whether it be motor insurance or otherwise.

The Cost of Insurance Working Group has met ten times to date and will continue to meet until the end of the year. The work is being progressed through four subgroups.  These subgroups have been meeting on a weekly basis since their establishment on 1 September 2016.

The Working Group and the four subgroups have engaged in a consultation process and has met with and heard from a variety of relevant stakeholders including: Insurance Ireland, individual insurance companies, the Irish Brokers Association, AA Ireland, the Consumers Association of Ireland, the Law Society, the Bar Council, Irish Road Haulage Association, the Car Rental Council, the National Transport Authority and Tiomanai Tacsai na hEireann. I have also invited submissions to the Working Group from all interested parties to .

In addition, the Working Group has engaged with relevant insurance companies as part of this consultation process. The views and submissions of insurance companies, and all those from interested parties, are being considered as part of the ongoing work of the Working Group.

The Working Group provided me with an initial set of emerging recommendations at the end of October 2016 which are now available on my Department's website. Since then, the Working Group has been working to finalise their Report and to develop an action plan to enable the relevant Government Departments and Offices to commence the implementation of agreed priority actions.  The report and action plan will detail any legislative or regulatory changes that may be required and will include a detailed timeline for implementation.

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