Tuesday 28 February 2017

Central Bank 'throwing drivers to insurance wolves'

Charlie Weston

Charlie Weston

John McGuinness launched the report on motor insurance at Leinster House yesterday. Photo: Tom Burke
John McGuinness launched the report on motor insurance at Leinster House yesterday. Photo: Tom Burke

Regulators at the Central Bank have been accused by an Oireachtas committee of abandoning motorists who have been hit with massive rises in insurance premiums.

Insurers were also accused of operating a closed shop, imposing unjustifiable increases and not being open about settling suspect claims.

The Oireachtas Finance Committee claimed the Central Bank had abandoned its role in protecting consumers hit by "exorbitant" price hikes.

In a report on insurance pricing, the committee states: "It would appear, to the committee, that the Central Bank has abrogated responsibility for protecting consumers by claiming European law prevents it from getting involved in pricing and risk.

"Thus, it is the opinion of the committee that the consumer has been thrown to the wolves."

The Central Bank and the Competition and Consumer Protection Commission were called on to do more to stop motorists having to bear all the financial pain for failures in the insurance sector. The cost of insurance has shot up in the past two years. Official figures show that premiums have risen by 70pc in three years.

In a report that makes 71 recommendations, the Oireachtas committee says drivers should be given more information on why they are being asked to pay so much more at the moment.

It accused insurers of having a "closed mentality" due to their unwillingness to share their figures on the seven out of 10 claims that are settled directly by insurance companies. Just 10pc of claims are settled in the courts, with 20pc settled by the Injuries Board.

The report adds: "The committee has concerns about the bona fides of the insurance sector in undertaking to provide this information in future of its own accord."

The committee said it was worrying that there was a "lack of any rationale or explanation for the sudden and inexplicable increases".

Motorists should be given a detailed breakdown of how their insurance cover has been calculated, the committee recommended.

Committee chairman John McGuinness said the hikes in motor cover were not justified, were having a negative impact on Irish society, and were not sustainable.

Read More: Calls for motorists to be given detailed breakdown of how insurance is calculated

"The price increases felt by so many citizens and businesses over the previous three years are not sustainable and, in my opinion, not justified," he said.

The Joint Committee on Finance, Public Expenditure and Reform wants explicit recognition that a valid NCT certification means a car is roadworthy, no matter how old it is.

Irish Independent

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