Central Bank forces insurance companies to be more transparent

New Central Bank regulations will require insurance companies to provide customers with more information when renewing motor insurance policies and other non-life insurance policies. This will ensure transparency.

Insurers must now provide individual policyholders with details of the premium paid for private motor insurance renewals in the previous year.

This information must feature prominently on the same page as the renewal premium.

Motor insurers are also now required to provide a quotation for each policy option available to the customer, such as comprehensive, third-party fire and theft cover, or third-party only.

In addition, insurers must also extend the renewal notification period from 15 to 20 working days for motor, health, damage to property, and general liability insurance, to allow policyholders more time to seek comparison quotes.

Gráinne McEvoy, director of consumer protection at the Central Bank, said the rules will “help consumers make better-informed decisions, when shopping around for their insurance policies.”

“Motor insurance, in particular, can represent a significant outlay for many people, so these changes will help people to shop around and make informed choices,” she said.

“We are insisting that insurers put the price comparison on the same page of any renewal notice.

“This makes it easy for customers to see if their premium has increased. We expect the insurance sector to embrace these rules, in the best interest of their customers. And the Central Bank will closely monitor their compliance.”

Brokers Ireland, which represents 1,250 insurance broker firms, warned that the new changes could result in confusion for consumers, though.

Cathie Shannon, director of general insurance at Brokers Ireland, said the changes could mean “even more paperwork... with no indication that any of it will be read”.

It is possible, in the initial stages, in particular, that confusion would be caused, she said.

Consumers would be expected to navigate and digest the additional information and some might well be motivated to choose the cheapest of the motor quotations provided, with too little or no regard for the level of cover, Ms Shannon said.