The Competition and Consumer Protection Commission (CCPC) has confirmed that it has not looked into the rapid premium increases being felt by motorists across the country as it would not be the best use of its resources.
Motor insurance costs have surged 35% higher in the past year and more than 60% since January 2014.
The CCPC — formerly the Competition Authority — has instead focused its attention largely on unregulated sectors where its work can have the “greatest impact”.
“The CCPC can confirm that the reasons for the recent increase in insurance costs is not an area which it has examined.
"The principal reasons being that, in general, where there is a sectoral regulator, in this case the Central Bank of Ireland, the CCPC would defer to that authority in the first instance.
"In the CCPC’s view this is the most efficient way of responding to issues across the public sector."
The CCPC is “acutely aware” of the impact of rising costs on consumers whom it advised to shop around for the best deal, however.
The watchdog also said it supports the Injuries Board’s call for further clarity on the precise cause of increases and called for greater transparency “in the interests of consumers and wider society”.
Since the beginning of 2015, the CCPC and Central Bank have not had any correspondence on the issue.
It has had one “brief email exchange” with the Department of Finance when the watchdog was asked to participate in a review of the motor insurance compensation scheme which it was unable to accommodate as the request was outside of its remit.
Consumer Association of Ireland policy and council advisor Dermott Jewell said the CCPC should re-consider “with some degree of urgency” its decision not to investigate the sector given its role in safeguarding consumers’ interests.
While the CCPC pointed to the Central Bank as the regulator of the insurance industry and the Department of Finance which is carrying out a review of the sector, Mr Jewell said neither of these bodies’ involvement was entirely satisfactory in protecting the interests of motorists.
The department’s review is yet to consider the factors behind the soaring cost of cover having focused firstly on the fallout from the collapse of Setanta Insurance.
Fianna Fáil finance spokesperson Michael McGrath said serious questions exist over competition in the insurance industry which firstly hit insurers’ profits to such an extent that many ran into financial difficulty before aggressively hiking premiums to the detriment of “bewildered” motorists.
“Consumers are bewildered by these wild swings in premiums at a time when overall road safety levels have improved. In the absence of comprehensive industry data customers are asked to take the word of the industry that price hikes are justifiable.
“The establishment of a motor insurance database aggregating data across insurers would considerably increase transparency in the motor insurance industry and improve policy formulation without breaching commercial confidentiality,” Mr McGrath said.