Govt urged to drop insurance premiums levy

The Government will be urged to abolish its 2% levy on all insurance premiums as part of recommendations aimed at reforming the industry.

A report is also expected to recommend the strengthening of an existing law allowing unlicensed vehicles to be confiscated.

It will call on the Government to make insurance reform its priority in the next session of the Dáil.

Donie Cassidy, chairman of the joint parliamentary committee which drew up the interim report, said an urgent overhaul of the industry was needed.

He said: “Our people on the ground are suffering. Everyone is suffering because of the enormous amounts of insurance they are being charged.”

The report is expected to make about 40 recommendations, including the abolition of the 2% government levy on all premiums.

It will ask the insurance industry how it can justify the high cost of insurance despite recent profits.

The committee also wants an expert group to draw up guidelines which will set out appropriate levels of compensation for injuries.

Mr Cassidy said: “The Government has outlined this as the biggest single challenge to jobs and employment in Ireland.

“And in fairness to the ministers, they have been tackling this head-on. There are four bills due to come before the house this autumn session.”

He said the joint committee on enterprise and small business wanted a commitment that the Government would get the bills through parliament by the end of December.

Despite the claims, Michael Kemp, chief executive of the Irish Insurance Federation, said there had been a significant reduction in premiums.

“I don’t have the power to bring down motor insurance myself,” he said. “My members obviously look at their own pricing decisions in light of their own situation.

“But there have been quite significant reductions in premiums in the last few months and I would be hopeful that there could be more in the coming months.”

The joint committee met senior ministers last month to assess the insurance industry and will sit again when the Dáil returns in October.