Insurance review yet to investigate motor costs

The Government’s review of Ireland’s insurance market is yet to begin its investigation into the cost of motor insurance policies despite soaring premiums heaping pressure on businesses and motorists.

Finance Minister Michael Noonan ordered a review of the sector in January 2016 as the steep increase in costs showed no sign of abating.

Motor premiums are now 60% more expensive than in January 2014 with costs having spiralled 35% higher this year alone. 

That review is ongoing but has yet to begin investigating the factors driving premiums ever-higher with the initial phase having focused solely on the collapse of Setanta Insurance and the ramifications of its demise. 

The first phase is due to be completed in the coming weeks after which attention will turn to the motor industry and the issue of rising costs - six months after the review began.

“My Department has embarked on a review of policy in the insurance sector which is being undertaken in consultation with the Central Bank and other Departments and agencies. 

"The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector.

“The first phase of the review is focused on the motor insurance compensation framework, and this work is nearing completion. 

"The next phase of the review involves examining the factors contributing to the increasing cost of insurance and identifying what short-term measures could be introduced to help reduce the cost of insurance for consumers and businesses.

“In a week or two the task force will proceed to examine insurance in general and it will start with motor insurance,” Mr Noonan said.

That phase will then take “some months” to be completed, Mr Noonan said, adding that he was unable to provide “a finer timeline”.

Mr Noonan was responding to a parliamentary question from Sinn Féin finance spokesperson Pearse Doherty. 

Mr Doherty accused the government of not taking the issue seriously and described the progress of the review as “shocking”.

“The government is years behind public opinion on this issue. I have been calling for the government to take action for some time including through an amendment to a motion which was passed by the Dáil this month. 

"It is clear this government is not taking the spiralling cost of car insurance seriously. 

"The revelation by the Minister his review has not even begun to consider the issues behind the massive increases in premiums affecting consumers is clear evidence the government is not taking the cost of spiralling car insurance.

“The work to prevent another Setanta is an important part of the work to fix our insurance system but the fact that has been the only issue discussed yet is shocking,” Mr Doherty said.

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