The Government has welcomed the outcome of an investigation by the competition watchdog into alleged price signalling by motor insurers, saying premiums must now fall, although the Opposition said the decision not to take legal action against the insurers involved was a blow to consumers.
And, the Tánaiste has confirmed, the Government is to "significantly strengthen" the powers of the consumer watchdog by the end of the year as part of its overall commitment to insurance reform.
The Competition and Consumer Protection Commission's (CCPC) probe took place over five years and preliminary findings indicated reasonable grounds to suspect that competition law had been broken between 2015 and 2016.
However, the CCPC announced it had secured legally binding commitments from six parties that were under investigation in the private motor insurance sector, with AIG Europe S.A., Allianz PLC, AXA Insurance DAC, Aviva Insurance Ireland DAC, FBD Insurance PLC and AA Ireland Limited all agreeing to reform their internal competition law compliance programmes.
The CPCC said a seventh party, Brokers Ireland, formerly known as the Irish Brokers Association and the Professional Insurance Brokers Association, had refused to enter into similar commitments.
Responding to the CCPC report, Tánaiste Leo Varadkar said it was "a good outcome" and that the priority now was for premiums to fall for road users.
"The upcoming Competition (Amendment) Bill is a priority this year for Government, as part of our overall commitment to reform the insurance sector," he said.
"The new law will significantly strengthen the CCPC’s powers, giving them the ability to administer significant fines for breaches of competition law. We will continue to implement our Insurance Reform Plan, which is already making an impact on costs."
Robert Troy, minister of state with responsibility for company law, said the investigation is a "positive result" for consumers and the new law will be published within months. Competition is important for the market, he added.
However, Sinn Féin's Finance spokespersion, Pearse Doherty, said the government needed to end "light touch regulation".
1. This needs to be called out. 11 years after Gov committed to give the Competition Authority these powers, 10 years after it sought them & 6 months after the (missed) deadline to transpose the Directive that would provide them into law, the Bill still hasn't been published... https://t.co/DC9OOMEIty— Pearse Doherty (@PearseDoherty) August 20, 2021
“In its preliminary findings, the CCPC made clear that it had reasonable grounds to suspect that competition law had been broken between 2015 and 2016, a period in which motor insurance premiums rose by an astonishing 35%.
“Despite this, and the time and resources that have gone into this probe in the past five years, the Competition Authority has chosen not to take legal action."
The CPCC said it can take legal proceedings to enforce the agreement should any party fail to comply with the six undertakings, which includes an annual submission to the CCPC.
Brian McHugh, Member of the Commission with responsibility for Competition Enforcement and Mergers, said the CPCC did not accept that adequate compliance measures were in place in these businesses, but that there had been "constructive engagement" when it came to the compliance reforms.