Paschal Donohoe (Dublin Central, Fine Gael)
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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 or the terms and conditions they apply in those policies.

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, the number of drivers, and the location of storage. 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 respect of motorists, such as those noted in the details supplied, who lose access to a “no claims bonus” because they have not been insured for a number of years, I understand that in general, this is because insurance companies set a date by which a no-claims bonus will expire, where the driver has held no insurance in their own name for two or more years. This applies whether the person continues to reside in Ireland, or they decide to move abroad and it is primarily a commercial matter for insurance companies. I understand from Insurance Ireland that this is because the possession of continuous insurance without making a claim is taken as positive evidence of the unlikelihood of a future claim being made – thus resulting in a discount on their premium known as a no claims bonus. They also note that different insurers will price the increased likelihood of a claim being made in the absence of such continuous insurance in different ways and that most will refuse to apply a no claims bonus in situations where there has been no driving experience for a set number of years. As previously mentioned, such decisions are commercial and based on their application of the rating factors noted above and also on the fact that the risk profile of such a person has changed.

The Deputy should note that during the Cost of Insurance Working Group’s work in relation to motor insurance, this issue was raised mainly in the context of returning emigrants, who may have found it difficult to secure insurance, despite having driving experience while abroad. In this respect, a protocol was agreed between Insurance Ireland and the Department of Finance, under which insurance companies committed to accepting the driving experience of such drivers gained while abroad, when the driver has had previous driving experience in Ireland. The details of it is available on Insurance Ireland’s website and the websites of its member companies. The guiding principle of the protocol is to ensure that a returning emigrant is not treated differently to any other driver, subject to verification of their continued driving experience and the normal acceptance criteria of the company. Thus, a returning emigrant will not be disadvantaged from spending that time abroad. Furthermore, under the protocol, insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein.

It is important to note that the protocol also states that if more than two years have passed since the Irish motor insurance policy was cancelled/lapsed, the Irish No Claims Discount is no longer valid. Notwithstanding this, if the person has been abroad for longer than two years, Insurance Ireland members have agreed through the protocol that if the person has claims-free driving experience in a different country in their own name, they will take this experience into consideration if that person seeks a quotation from an insurer, on their return to Ireland, subject to the appropriate verifiable documentation being provided.

Finally, any motorist having difficulty in relation to this issue can contact Insurance Ireland, who operate a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance at feedback@insuranceireland.eu.