Michael Noonan Told to spend up insurance review
Finance Minister Michael Noonan has been warned squeezed
motorists and businesses cannot afford to wait until the end of the
year for a review of spiralling insurance costs to be published.
The Department of Finance is undertaking a review of the motor
insurance market after rapid price increases over the past 12 months
have seen premiums surge 34%.
Speaking in the Dáil in response to a query by Fianna Fáil TD Thomas
Byrne, Mr Noonan reiterated his stance that the review would be
finalised by the end of 2016.
The finance minister came under pressure from Mr Byrne’s Fianna Fáil
colleague, finance spokesperson Michael McGrath, to fast-track the
process, however.
Mr McGrath said he accepted the minister did not have the power to
directly affect insurance costs but warned that the high cost of motor
protection would harm consumers and stunt economic growth if
allowed to persist.
“This issue cannot wait until the end of the year… While the industry
has a role to play in this regard and must have its voice heard, the
voice of consumers also needs to be heard. Deputies hear day in and
day out about dramatic increases in motor insurance premiums.
“These increases are occurring across the board but younger drivers
and the owners of older vehicles, in particular, are being hammered by
increases in insurance premiums.
“The current rate of increase is not sustainable as it will act as a drag
on the economy and impact on the business community. We need to
get to the bottom of the factors driving the increases and then tackle
them,” Mr McGrath said.
The focus of the first phase of the review is on the motor insurance
compensation framework.
Issues in this regard were highlighted by the collapse of Setanta
Insurance and subsequent wrangling over whether the Insurance
Compensation Fund or Motor Insurers Bureau of Ireland was liable for
policyholders’ claims.
Mr Noonan said the first phase was “nearing completion” but was
unable to say whether policy initiatives could be introduced once it has
been finalised or whether this would only happen once the entire report
has been published.
The second phase of the review will specifically examine the spiralling
cost of motor premiums which are now 60% more expensive when
compared with January 2014.
“Many factors are involved in the dramatic escalation in motor
insurance premiums, including court awards, the need for a review of
the Personal Injuries Assessment Board, legal costs, false and
exaggerated claims, regulatory oversight, and the lack of transparency
regarding the profits earned by insurance companies. All these issues
must be examined,” Mr McGrath added.
The insurance sector argues an increased number of claims, growth in
the number of people going to court to seek compensation, and low
levels of reserves in the industry are to blame for the hike in premiums.
Industry experts have criticised insurance companies for financial
mismanagement which they claim has contributed to the increases.
motorists and businesses cannot afford to wait until the end of the
year for a review of spiralling insurance costs to be published.
The Department of Finance is undertaking a review of the motor
insurance market after rapid price increases over the past 12 months
have seen premiums surge 34%.
Speaking in the Dáil in response to a query by Fianna Fáil TD Thomas
Byrne, Mr Noonan reiterated his stance that the review would be
finalised by the end of 2016.
The finance minister came under pressure from Mr Byrne’s Fianna Fáil
colleague, finance spokesperson Michael McGrath, to fast-track the
process, however.
Mr McGrath said he accepted the minister did not have the power to
directly affect insurance costs but warned that the high cost of motor
protection would harm consumers and stunt economic growth if
allowed to persist.
“This issue cannot wait until the end of the year… While the industry
has a role to play in this regard and must have its voice heard, the
voice of consumers also needs to be heard. Deputies hear day in and
day out about dramatic increases in motor insurance premiums.
“These increases are occurring across the board but younger drivers
and the owners of older vehicles, in particular, are being hammered by
increases in insurance premiums.
“The current rate of increase is not sustainable as it will act as a drag
on the economy and impact on the business community. We need to
get to the bottom of the factors driving the increases and then tackle
them,” Mr McGrath said.
The focus of the first phase of the review is on the motor insurance
compensation framework.
Issues in this regard were highlighted by the collapse of Setanta
Insurance and subsequent wrangling over whether the Insurance
Compensation Fund or Motor Insurers Bureau of Ireland was liable for
policyholders’ claims.
Mr Noonan said the first phase was “nearing completion” but was
unable to say whether policy initiatives could be introduced once it has
been finalised or whether this would only happen once the entire report
has been published.
The second phase of the review will specifically examine the spiralling
cost of motor premiums which are now 60% more expensive when
compared with January 2014.
“Many factors are involved in the dramatic escalation in motor
insurance premiums, including court awards, the need for a review of
the Personal Injuries Assessment Board, legal costs, false and
exaggerated claims, regulatory oversight, and the lack of transparency
regarding the profits earned by insurance companies. All these issues
must be examined,” Mr McGrath added.
The insurance sector argues an increased number of claims, growth in
the number of people going to court to seek compensation, and low
levels of reserves in the industry are to blame for the hike in premiums.
Industry experts have criticised insurance companies for financial
mismanagement which they claim has contributed to the increases.
No comments: