Car insurers face major probe over blocking EU rivals
THE European Commission has launched a major investigation into alleged attempts by the Irish motor insurance industry to block out cheaper European rivals.
It follows a commission raid last year on the Dublin offices of Insurance Ireland, the industry representative group here.
Documents from that raid form part of the investigation, which involves allegations that Insurance Ireland prevented cheaper foreign competition from becoming members of its organisation.
The commission is examining the membership application process, in which sponsorship from an existing Insurance Ireland member is required.
Several EU companies have complained that the process is designed to block cheaper foreign competition from joining – in contravention of Article 30 of the EC Treaty and other EU free trade measures. Membership of Insurance Irecomplaint Soaring costs: Dara Calleary land allows members access to a database on drivers’ penalty points, driver licences and claims history. Members are also given access to InsuranceLink which hosts the information on fraudulent claims by drivers. The investigation comes after Gibraltarbased Zenith Insurance withdrew from the Irish market in 2016 citing ‘lack of engagement with us by Irish industry bodies, which we believe creates a market disadvantage for us and our partners’.
It’s not yet known if it was Zenith that made the initial to the European Commission.
Insurance Ireland said in a statement yesterday that it had never refused membership of the association.
‘In 2012, Insurance Ireland’s membership included 12 companies providing motor insurance. In 2017, this had increased to 18,’ it said.
‘Insurance Ireland has cooperated fully with the European Commission in its inquiries and is confident its practices are fully compliant with competition law.’
Sinn Féin TD Pearse Doherty said yesterday that the alleged behaviour by Insurance Ireland would come as no surprise to drivers who had dealt with the industry. He called on Insurance Ireland to drop its ‘frivolous opposition’ to a new claims database, branding their stance a ‘sick joke’.
Fianna Fáil spokesman on enterprise, Dara Calleary, said everyone was aware of soaring insurance costs on businesses and individuals. ‘Many have seen insurance costs rise by between 40% and 60% over the past several years,’ he said. ‘There is considerable evidence in recent months of business closures as a consequence of excessive insurance rises. For young drivers in particular, there are many examples of people being unable to afford the premiums charged.
‘While the Government says it is committed and published bucketloads of reports, it has failed to stop insurance price hikes,’ he added.
National Competitiveness Council figures show that Irish insurance price inflation is significantly above that of the eurozone, enabled by a lack of competition in the Irish market. The Alliance for Insurance Reform said that the Central Bank is not supervising the insurers properly.
‘The Central Bank, which is supposed to be supervising the insurers on behalf of consumers, is actually doing the opposite, having abolished the only data that offered some insight into the industry, the so-called “Blue Book” so that there is now no usable data available on the industry,’ it said.
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‘Contravenes free trade measures’