Lowering car insurance quotes ‘unacceptable’
The Joint Committee on Enterprise and Small Business has expressed serious concern about the practice which it claims is "unacceptable".
A second interim report on reform of the insurance industry - due to be published shortly is also calling on the Government to abolish the 2% State levy on all insurance premiums.
The committee has voiced strong criticism about the practice of insurance firms only offering lower quotes when customers have obtained a cheaper quotation elsewhere.
"On the one hand, it shows there is a level of competition in the market but it also shows that insurance companies are quoting excessive premiums to existing policy holders," the report says.
The committee said it became clear from its consultative process that insurance firms do not predetermine their prices and make adjustments in light of prevailing conditions.
"If the policy holder can get a lower premium, then the existing insurance company should not be able to lower the quote to retain the business. This would ensure that insurance companies give competitive quotations to existing policy holders on renewal," says the report.
It recommends the Irish Financial Services Regulatory Authority should introduce a code of practice preventing insurance companies from engaging in such a practice.
The report also calls for the abolition of the 2% levy on insurance premiums because it is "merely a source of tax revenue".
The levy, which raises €88m per annum for the Exchequer, was introduced in the mid-1980s to bail out AIB following the collapse of the Insurance Corporation of Ireland.
The report also criticises the unsatisfactory pace of reforms, promised by Transport Minister, Seamus Brennan, of the licensing and training of young drivers.
