Written answers

Wednesday, 30 May 2018

Department of Finance

Motor Insurance Costs

Photo of Mary ButlerMary Butler (Waterford, Fianna Fail)
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91. To ask the Minister for Finance if he will report on the working group established to review the factors which are influencing the increase in cost of motor insurance and for particular sectors, for example, taxi drivers in relation to both the availability and cost of SPSV insurance (details supplied); if new taxi drivers can obtain vehicle insurance at a reasonable price; and if he will make a statement on the matter. [23908/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, 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 acknowledged that pricing in the motor insurance sector has been subject to a lot of volatility in recent years and, indeed, the problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group. Its Report on the Cost of Motor Insurance was published in January 2017. As the Deputy notes, the Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes.

Work is ongoing on the implementation of the recommendations and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The Fifth Quarterly Progress Update was published on 11 May 2018: . It shows that of the 50 separate deadlines set to date within the Action Plan, 40 have been met. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”.

In line with the EU framework, the Cost of Insurance Working Group’s starting position on insurance for small public service vehicles was that it was not possible for it to make a recommendation on pricing as this is primarily a commercial matter for insurers. It did however recognise that this sector serves a social as well as an economic purpose, particularly in rural areas where public transport is less readily available. This position was acknowledged by the inclusion of Recommendation 10 in the Report of the Cost of Insurance Working Group on the Cost of Motor Insurance. This recommended that the Advisory Committee on Small Public Service Vehicles should enter regular discussions with Insurance Ireland to explore solutions for drivers in the sector.

That Fifth Update Report mentioned above outlines the implementation of this recommendation. In summary, Insurance Ireland met with the Advisory Committee on Small Public Service Vehicles, commonly known as the Taxi Advisory Committee (TAC), on 22 May 2017. The TAC submitted the required report in relation to this meeting on 21 June 2017 to the Minister for Transport, Tourism and Sport. To date, no further meetings have taken place between the TAC and Insurance Ireland. However, the TAC has advised my officials that it is keeping itself informed of developments in the area, particularly through the industry representatives on the Committee, and future meetings with Insurance Ireland are a part of the TAC strategy. Recommendation 10 has been completed in the sense that the TAC has reported to the Minister for Transport. Notwithstanding this, my view would be that work needs to continue on this general issue. Therefore, I look forward to further engagements between the TAC and the insurance industry.

I would add that, notwithstanding the role of the TAC, the issues raised by the taxi sector were in the main similar to those affecting consumers generally, notwithstanding that there are risks that are specific to the sector. While there is no silver bullet to reduce the cost of insurance, I believe that cooperation and commitment between all parties can deliver fairer premiums for consumers, including taxi drivers.

I also believe that the work of the Cost of Insurance Group should better facilitate potential new entrants to the market. In this regard, I have been informed by my officials that Insurance Ireland has stated that there has been some increase in market capacity in relation to the provision of motor insurance for taxi drivers recently.

Finally, if a consumer is unable to secure a quotation on the open market, he or she may be in a position to avail of the Declined Cases Agreement (DCA) process. Under the terms of the DCA, the insurance market will not refuse to provide insurance to an individual seeking insurance if the person has approached at least three insurers and has not been able to obtain cover from them. Insurance Ireland also operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. The relevant contact details are: feedback@insuranceireland.eu or declined@insuranceireland.euor 01-6761914.

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