Central Bank flagged concerns over plan for it to host insurance register
SENIOR Central Bank officials raised concerns internally about attempts to have it assigned responsibility for a national database of motor insurance claims.
Documents released under Freedom of Information to the Irish Independent show the regulator believed it would be inappropriate for it to be given the task, as it is independent from Government.
The prospect of a national claims register or database emerged in the autumn of last year, and it was speculated that it could be housed in the Central Bank.
In an email to Governor Philip Lane in November, former deputy governor Cyril Roux said assigning responsibility for the database to the Central Bank would “not fall under the supervisory tasks of the bank, nor under its statistical mandate”. He said Gerry Cross, the director of policy and risk, also had concerns.
“Such a register would be completely foreign to the role and responsibility of a central bank,” Mr Roux wrote.
He argued that an insurance claims register would face “insuperable logistical difficulties”.
Governor Lane said he generally agreed.
In a letter drafted on behalf of Governor Lane, and intended for then junior Finance Minister Eoghan Murphy, the bank noted that assigning responsibility for the database to the Central Bank as problematic.
“Such register would likely face significant challenges in terms of, inter alia, data protection legislation, requiring proprietary commercial sensitive information, accessing information from insurance undertakings operating in Ireland on a cross border basis, significant systems changes and development costs both for insurance undertakings and the body establishing it,” the letter noted.
“The lead-in time for the establishment for such a register would be significant, measured in multiple years. The scale of the challenges for insurers could influence firms’ decisions on business models in the Irish market and the resultant industry costs may be passed on to policyholders.”
It said that several countries have developed a database of national claims statistics compiled by an industry or professional body.
“In any case, I do not consider it appropriate that the Central Bank be assigned responsibility for the establishment or administration of such systems, as it would be ascribing a governmental task to an institution that is accountable to the Oireachtas, but independent from Government.”
A Central Bank spokesman said the letter was not sent, but an alternative was on December 6. The spokesman said it set out “how the Central Bank will assist in bringing forward more granular information on motor claims into the public domain, while setting out the challenges associated with setting up a national claims register”.
In January, a Government-backed report recommended a database be set up, administered by the Central Bank.
It noted that the bank had highlighted the implications with regard to its mandate, and said legislative change would be needed.
Governor Philip Lane’s team felt new role would be problematic
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