Wednesday, 3 November 2021
Department of Finance
88. To ask the Minister for Finance the efforts being made to reduce the cost of insurance for returning Irish emigrants who are penalised due to time spent abroad; and if he will make a statement on the matter. [53419/21]
At the outset it is important to note that 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 intervene in the provision or pricing of insurance products, or have the power to direct insurance companies to provide cover in such circumstances. This position is reinforced by the EU framework for insurance (the Solvency II Directive).
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.
Notwithstanding this, the difficulties faced by returning emigrants in respect of motor insurance was recognised by the Cost of Insurance Working Group (which ran between 2016 and 2020) and was the subject of a particular recommendation. In this regard, a protocol was agreed between Insurance Ireland and the Department of Finance in relation to returning emigrants, 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. My Department continues to review the implementation of this recommendation through its regular engagement with Insurance Ireland.
In relation to insurance more generally, seeking to secure a more sustainable and competitive market through deepening andwidening the supply of insurance in Ireland remains a key policy priority for this Government. It is my intention, along with Minister of State Fleming, to work to ensure that the commitments outlined in the Programme for Government are progressed in accordance with the Action Plan for Insurance Reform. As the Deputy may be aware, the Cabinet Committee Insurance Reform Sub-Group in July published the first six-monthly Implementation Report of the Action Plan. This shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed. The Sub-Group’s focus now is on implementing the outstanding actions on time.
I would also like to note that, according to Central Statistics Office (CSO) data for September 2021, motor insurance prices are continuing to decline. Motor insurance prices in June were 36.6% lower than their peak in July 2016; and 8.4% lower than when the Government’s Cabinet Committee Sub-Group on Insurance Reform was established in September 2020. It is the Government’s intention that this positive downward trend continues as the reform agenda progresses, including for returning emigrants.
In addition, it may interest anyone affected by this issue to know that Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance cover. This can be accessed at firstname.lastname@example.org. In addition, Brokers Ireland can be contacted at email@example.com.
I would like to assure the Deputy that work remains ongoing across Government to deliver further elements of the Action Plan, including measures to reform the Personal Injuries Assessment Board, reduce fraud, and make changes to the duty of care in order to strengthen waivers and notices. It is my hope that the implementation of these key actions in particular should further help to improve the affordability and availability of insurance for all consumers, businesses and voluntary groups – including motorists in particular.