Brendan Burgess
Founder
- Messages
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At Oireachtas Finance Committee
Motor Insurance
Turning to motor insurance costs, the Central Bank welcomes the focus that this Committee and that of the Cost of Insurance Working Group led by Minister Eoghan Murphy has brought to bear on this issue. As you know, the Central Bank appeared before this Committee in relation to insurance in 2016.
The Central Bank recognises that volatility in the price of insurance has an unwelcome impact on consumers. While the Central Bank does not have a role in the setting of premiums and, in common with all supervisory authorities in the European Union, is explicitly prohibited by European law from having one by Article 181 of the Solvency II directive, the Central Bank is committed to working with this Committee, the Cost of Insurance Working Group and other stakeholders on aspects related to this issue in ways that are appropriate to our mandate.
There were a number of common themes between the findings of this Committee’s final report and the work of the Department of Finance Cost of Insurance Working Group, of which the Central Bank was a member.
For example, both the Committee and the Working Group found there was scope to improve the renewal process to assist consumers in their purchase of insurance. Similarly, both the Committee and Working Group recommended substantive work be undertaken to improve data availability.
The Central Bank, through the Working Group process, is the lead owner for a number of recommendations and actions in these areas and work has begun on implementation.
In the area of renewals, the Working Group recommended that insurers provide additional information on the premium breakdown to consumers and that the renewal notification period be extended from 15 to 20 working days to make it easier for motorists to compare pricing when purchasing insurance.
Requirements for provision of information in non-life renewal notices are set out in the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007. In order to amend these regulations, the Central Bank is required to undertake a standard consultation process, including engagement with consumer stakeholders and industry. The consultation will be conducted in Q4 this year, in line with the timeframes set out by the Working Group, with regulatory change, if required, in 2018.
In the area of data availability, the Working Group has recommended the establishment of a national claims information database. The Central Bank is currently working with the Department of Finance and other stakeholders to define key aggregated statistical data on motor claims for publication in the near future, which will, in turn, assist with the development of the database in 2018 as recommended. It should be noted, however, that the database function will represent an extension of the Central Bank’s mandate and will therefore require legislative change.
As I said at the outset, the Central Bank is committed to working with this Committee, the Department of Finance Cost of Insurance Working Group and other stakeholders in relation to this issue in ways that are appropriate to our mandate.
Motor Insurance
Turning to motor insurance costs, the Central Bank welcomes the focus that this Committee and that of the Cost of Insurance Working Group led by Minister Eoghan Murphy has brought to bear on this issue. As you know, the Central Bank appeared before this Committee in relation to insurance in 2016.
The Central Bank recognises that volatility in the price of insurance has an unwelcome impact on consumers. While the Central Bank does not have a role in the setting of premiums and, in common with all supervisory authorities in the European Union, is explicitly prohibited by European law from having one by Article 181 of the Solvency II directive, the Central Bank is committed to working with this Committee, the Cost of Insurance Working Group and other stakeholders on aspects related to this issue in ways that are appropriate to our mandate.
There were a number of common themes between the findings of this Committee’s final report and the work of the Department of Finance Cost of Insurance Working Group, of which the Central Bank was a member.
For example, both the Committee and the Working Group found there was scope to improve the renewal process to assist consumers in their purchase of insurance. Similarly, both the Committee and Working Group recommended substantive work be undertaken to improve data availability.
The Central Bank, through the Working Group process, is the lead owner for a number of recommendations and actions in these areas and work has begun on implementation.
In the area of renewals, the Working Group recommended that insurers provide additional information on the premium breakdown to consumers and that the renewal notification period be extended from 15 to 20 working days to make it easier for motorists to compare pricing when purchasing insurance.
Requirements for provision of information in non-life renewal notices are set out in the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007. In order to amend these regulations, the Central Bank is required to undertake a standard consultation process, including engagement with consumer stakeholders and industry. The consultation will be conducted in Q4 this year, in line with the timeframes set out by the Working Group, with regulatory change, if required, in 2018.
In the area of data availability, the Working Group has recommended the establishment of a national claims information database. The Central Bank is currently working with the Department of Finance and other stakeholders to define key aggregated statistical data on motor claims for publication in the near future, which will, in turn, assist with the development of the database in 2018 as recommended. It should be noted, however, that the database function will represent an extension of the Central Bank’s mandate and will therefore require legislative change.
As I said at the outset, the Central Bank is committed to working with this Committee, the Department of Finance Cost of Insurance Working Group and other stakeholders in relation to this issue in ways that are appropriate to our mandate.