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Irish drivers, hammered for the past two years with 40 per cent year on year rises in insurance premiums, have possibly just been thrown a lifeline by an Oireachteas committee charged with investigating the crisis in car cover.
John McGuinness TD, chairman of the Joint Committee on Finance, Public Expenditure and Reform, has hit out at the insurance industry saying that: "spiralling motor insurance premiums is making insurance unaffordable for many people and adding also to business costs. The report the Committee has launched today seeks to address the underlying factors contributing to the rising costs of motor insurance and to make recommendations to reverse this unsustainable situation."
Amongst the committee's recommendations are a statutory role for the Central Statistics Office in collating insurance data, that consumers be given more detailed information at renewal time, that the Central Bank should be given a more proactive role in regulation, with an emphasis on consumer protection, greater powers for the Personal Injuries Assessment Board (PIAB), that the Book Of Quantum (which sounds like a James Bond plot device but which is actually the recommended levels of compensation for injuries and damages sought through the courts) and a review of awards and costs of court proceedings.
"This cross-party report offers 71 recommendations which we believe can contribute significantly to addressing the lack of transparency, as well as the unfairness that is rampant in the market. We are calling for competition to be encouraged and for fundamental data-sharing to be mandatory in the insurance sector. The judiciary should also consistently use the revised Book of Quantum" said Mr McGuinness.
"Many claims are settled outside PIAB and the courts and the insurance company pay-outs are essentially invisible. We are calling for insurance companies to be compelled to provide detailed information on claims settled outside of PIAB and for PIAB to be modernised. Our Committee believes that it is long past time to ensure that policyholders can expect to obtain insurance at a reasonable price. We share consumers' frustration at the lack of fairness in the pricing regime and we are urging the Cost of Insurance Working Group in the Department of Finance - chaired by Mr. Eoghan Murphy TD, Minister of State - to work to implement some or all of our recommendations."
In a statement, Insurance Ireland, the umbrella group that represents the interests of insurance companies in Ireland said that it welcomed the publication of the report. Kevin Thompson, Chief Executive of Insurance Ireland said: "Today's report and the forthcoming recommendations from the Cost of Insurance Working Group should lead to the reforms necessary to address the high cost of claims and level of awards in the Irish market which has led to increased motor premiums. We share our customers' frustrations at the increase in motor premiums and recognise the public concern that exists on the issue. Insurance Ireland want to work collaboratively with Government to take the necessary actions to bring stability to the sector. Insurance Ireland is committed to, and is actively working on, transparency initiatives and data submissions to inform policy responses to the rising cost of claims. Insurance Ireland has provided approximately 50 responses to the Department of Finance and will continue to engage fully in this process. Insurance Ireland notes some commentary made in relation to anti-competitive practices. Insurance Ireland would urge anyone who has such concerns to formally raise them with the appropriate authorities so that they can be comprehensively investigated."