Government 'kicking the can down the road' on insurance reforms to end price gouging

The Government will seek to delay insurance reform which would abolish the practice of ‘dual pricing’ as it would hamper Ireland’s “attractiveness” to international insurers.

Speaking during a Dail debate on Sinn Fein’s signature Insurance (Restriction on Differential Pricing and Profiling) Bill, Junior Minister at the Department of Finance Sean Fleming said that Pearse Doherty’s legislation does not do what it claims to do.

He said that the bill does not account for the fact it would “reduce Ireland’s attractiveness as a place to do business for insurers which write insurance into other EU markets from Ireland”, adding that two-thirds of Irish insurers’ business is done in other jurisdictions.

In arguing that the bill should be put on hold for nine months until a Central Bank investigation into the practice of dual pricing can be completed, Mr Fleming said the Government would subsequently “act accordingly” per the financial regulator’s findings.

Dual pricing is the common term for the practice which sees insurer’s charging customers of long-standing inflated premiums while granting discounts to newer customers or those seeking to bargain for a deal.

Mr Fleming said that the Sinn Fein legislation is “not the correct solution at this time”, arguing that it would do away with differential pricing entirely as opposed to dual pricing alone, which would preclude discounts for customers in other spheres like mobile phone price plans and even discount vouchers.

“Of course it (dual pricing) is a practice which can work against consumers who may not be in a position to price different options,” Mr Fleming said. “We will protect these vulnerable people,” he said.

He argued that those who do shop around would be “negatively impacted” by a ban on dual pricing and that the practice encourages competition.

However, the Government met universal animosity to its stance from the opposition benches, after Mr Doherty declared that “the game is up” for insurers in his introductory statement. He said that his bill seeks to “radically shake up the insurance market and address the issues of the digital age”, those being the advantage proffered to those who have the ability to price compare online.

An irate Mairead Farrell, Sinn Fein TD for Galway West, declared her “disappointment” with the Minister’s stance, saying that it only serves to “kick the can down the road” while doing nothing for rural drivers who have no choice but to drive and pay what they are asked.

Labour’s Ged Nash announced his party would also support the bill, saying though “not perfect” it serves to do something about the fact “most people don’t have the time or resources” to switch their insurance provider easily, adding that the Government’s advice to “shop around, there’s plenty of value out there” is “insulting”.

Roisin Shortall said the Social Democrats would “wholeheartedly” support the bill and commended Mr Doherty for his longstanding work on the subject, while People Before Profit’s Richard Boyd Barrett declared himself “so bored of the Government’s story” regarding insurance and the delay of reform.

His RISE colleague Paul Murphy meanwhile noted that the argument that the Bill serves to over-reach ignores the fact that the Central Bank itself has in the past used the terms differential pricing and dual pricing interchangeably.

Independent Sean Canney meanwhile acknowledged the arguments that adopting the bill would “hamper Ireland’s attractiveness”. “They say we need competition, and that’s fine. But what about fairness for the customer?” he asked.

A vote on the second stage of the bill has been held over to a future date due to the ongoing Covid restrictions.