Customers suffering 'wholesale exploitation' at hands of dual-pricing insurance companies
Insurance companies have been accused of "wholesale exploitation" of customers by charging vulnerable people more than those who switch regularly.
The Central Bank has admitted there are potentially "problematic practices" where insurers charge customers different prices for the same policies.
The regulators are under pressure to clamp down on this so-called dual pricing.
The controversial practice sees vulnerable customers charged more for insurance products than those seen to be savvy.
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Central Bank officials were grilled when they appeared before an Oireachtas committee to explain why it has taken them so long to take action against insurance companies engaged in controversial dual pricing.
It is now conducting a probe into dual pricing.
Central Bank director general, financial conduct, Derville Rowland said the regulator was not totally against the dual-pricing practice, but banning it remained an option. It could take a couple of years to complete the probe into dual pricing, she said.
Director of insurance supervision in the Central Bank Domhnall Cullinan admitted that dual pricing had been going on in the insurance industry for decades and some companies in this market were engaged in it for 10 years now.
Sinn Féin senator Rose Conway-Walsh claimed there was "wholesale exploitation of customers" going on in the insurance industry from dual pricing.
She called for the Central Bank to quickly complete its probe into dual pricing.
Fianna Fáil finance spokesman Michael McGrath put to the regulators that this means they would have had a general awareness of dual pricing going on for years. "So it is an accepted norm across the industry and in Ireland," he told the regulators.
He said differential pricing was "there under your noses" when it comes to how banks treat new and existing customers.
Mr McGrath accused Permanent TSB bank of offering lower fixed rates to new customers than those charged to existing mortgage holders.
He said this meant existing customers of the bank had no option but to pay more.
Central Bank director of consumer protection Gráinne McEvoy insisted that banks were required by her office to tell mortgage holders what interest they are on and point out they could get a lower rate.