Niall Collins (Limerick County, Fianna Fail)
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255. To ask the Minister for Finance his views on a practice (details supplied) in relation to insurance; and if he will make a statement on the matter. [28134/20]

Paschal 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. Consequently, neither I nor the Central Bank are in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in individual cases.

It would appear that the details supplied are referring to an arrangement whereby the insurance policy is being paid by instalments, and that this is being facilitated through a financing arrangement as part of the insurance contract. In such cases, a consumer may have to pay an additional amount of interest on the premium amount over the period. It is my understanding that such arrangements are relatively common, and that they provide additional financing options for consumers who may not wish to pay for the insurance contract upfront.

In situations where a person is not satisfied with the actions of an insurance provider in relation to the service provided, it is advisable that that person make a complaint to the firm's internal complaint resolution process. The Consumer Protection Code requires that, if after 40 days the complaint has not been resolved to the customer’s satisfaction, the regulated entity must inform the consumer that they may refer their complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000. Investigations by the FSPO are free of charge to the complainant.

In addition to this, Insurance Ireland, the representative body for insurance providers in this country, operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu.

Noel Grealish (Galway West, Independent)
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256. To ask the Minister for Finance the status of current or pending legislation outlawing dual or differential pricing in the insurance market; and if he will make a statement on the matter. [28139/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that differential, or dual, pricing is the practice of quoting two different prices to different customers for the same product or service, even where those customers carry the same risk profile and cost of service. Late last year, the Central Bank of Ireland (CBI) announced that it would carry out a study into dual pricing in the Irish market. Separately, the Deputy will also be aware that the Programme for Government includes a commitment to work to remove this practice from the market and the Bank’s review is an important element of this undertaking.

The CBI’s review is ongoing and is focussing on motor and home insurance. It is being carried out in three phases, and the first of these was completed recently. While I welcome this, I note with concern that the Bank has observed that the majority of firms utilise differential pricing through various techniques and that a failure to recognise and / or acknowledge the practice on the part of some firms has raised significant concerns about their ability to assess its impact on customers. On foot of its findings, the CBI sent a “Dear CEO” letter, on 8 September 2020, to firms to highlight its concerns following this first phase. I now fully expect that firms will respond to these concerns in a positive manner and cooperate with the CBI.

The work of the Central Bank of Ireland is now moving to the next phases of its review, before it makes any final recommendations. On foot of this, I believe that it would be prudent to await the outcome of the review in advance of adopting any particular approach, including in relation to considering any possible steps to legislate to remove the practice of dual pricing. This is undoubtedly a complex issue and will need careful consideration of any potential remedies, and what overall impact they would have on consumers. We need to guard against the risk of unintended consequences in that in attempting to address an issue we don’t create an undesirable knock-on impact elsewhere. This could include dis-encouraging competition or new entrants to the market, all of which is not in Irish consumers long-term interests.

Finally, while I believe the CBI's initial findings demonstrate the need for consumers to shop around when taking out or renewing insurance, I also expect that insurance firms will treat their customers fairly. The recent preliminary findings of the Competition and Consumer Protection Commissions in relation to the motor insurance sector serve to remind us of the importance of insurance generally and the impact of the costs of insurance on consumers and businesses.