Car insurance bosses are under investigation for breach of competition law by talking up the price of insurance premiums.
The Competition and Consumer Protection Commission says statements that predicted price rises may have actually escalated prices. Witness summonses and information requests were issued yesterday to major motor insurance companies and groups representing insurers and brokers.
Among those summoned is representative body Insurance Ireland, whose chief executive, Kevin Thompson, acknowledged this time last year that increases were possible given the continuing trends as shown by CSO figures at the time.
Others made similar comments around that time and since. Commission chairwoman Isolde Goggin warned late last year that such open signalling of upcoming increases could amount to cartel behaviour.
Explaining the decision to start a formal investigation, Ms Goggin said: “Markets work best where businesses vigorously and independently compete against each other for customers.
“Statements signalling future pricing predictions or intentions may result in a degree of unspoken co-ordination, which may breach competition law. Statements by senior industry players have raised serious suspicion as to whether there is a link between these messages and subsequent price increases.”
Insurance Ireland said it would co-operate with the investigation but said it had done nothing wrong.
“Insurance Ireland is fully satisfied it has no issue in relation to competitive practice and is confident that this will be confirmed through this process,” it said.
Kevin Thompson is one of a number of industry representatives due before the Oireachtas Finance Committee tomorrow for the latest in a series of meetings on the growing problem of soaring premiums.
Also due to appear is Ciaran Phelan of the Irish Brokers Association, whose organisation published a survey last year reporting widespread expectations in its membership that motor insurance premiums would rise significantly this year.
Commission officials have also been asked to appear.
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