Wednesday, 20 May 2020
Department of Finance
115. To ask the Minister for Finance if his attention has been drawn to the fact that certain insurers are increasing the insurance premium of persons whose NCT certificate is out of date as a result of the NCT test centres being closed due to Covid-19; if the matter will be addressed; and if he will make a statement on the matter. [6613/20]
116. To ask the Minister for Finance if his attention has been drawn to the fact that certain insurers are using claims history information on a more granular geographic basis than before as a reason for increasing premiums; if the matter will be addressed; and if he will make a statement on the matter. [6614/20]
I propose to take Questions Nos. 115 and 116 together.
At the outset you should note that neither I, as Minister for Finance, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct insurance companies as to how they price their policies including whether they should use the two practices mentioned in the Deputies' questions.
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, in relation to motor insurance, factors may include those such as the age of the driver and the relevant driving experience, as well as the age and type of vehicle, how the vehicle is used, the claims record, and the number of drivers. Insurers also price in accordance with their own past claims experience, and do not all use the same combination of rating factors, so as a result prices vary across the market. In addition to the above, it is important for the Deputies to appreciate that I am not in a position to compel insurers to disclose information such as actuarial data covering the geographic basis of claims history and how it affects the pricing of premiums.
The above said, in relation to the issue raised about increased premiums where NCT certificates are out of date due to the COVID 19 related closure of the NCT test centres, I would note that Insurance Ireland has previously indicated that most of its members have accepted the four-month extension period for NCT certificates. As such I expect that this commitment will be honoured by the sector and if it is not then I believe that would be contrary to the spirit of the earlier Insurance Ireland announcement. As I have said many times previously, the sector must treat their customers fairly.
Finally, my view is that it is now more important than ever for consumers to shop around on their insurance policies. The Competition and Consumer Protection Commission (CCPC), on its website, recommends that consumers get quotes from a number of insurance companies, including their current one. Their website also includes a car insurance shopping around checklist and other tips on cutting car insurance costs which may prove useful to consumers.