Calls made for ur­gent law changes to pre­vent car in­sur­ance mar­ket ‘car­tel’

Irish Independent - - News - Char­lie We­ston Per­sonal Fi­nance Ed­i­tor

UR­GENT leg­isla­tive changes have been called for to pre­vent car­tel-type op­er­a­tions in the mo­tor in­sur­ance in­dus­try.

It comes as a ma­jor in­ves­ti­ga­tion by the Euro­pean Com­mis­sion into mo­tor in­sur­ance here is fo­cus­ing on al­le­ga­tions the in­dus­try has cre­ated ob­sta­cles for new play­ers to en­ter the mar­ket. Fol­low­ing a se­ries of raids last year, in­ves­ti­ga­tors are now analysing whether foreign com­pa­nies are fac­ing bar­ri­ers to en­ter­ing the Ir­ish mar­ket.

The Al­liance for In­sur­ance Re­form called on the Gov­ern­ment to make ur­gent leg­isla­tive changes to force more com­pe­ti­tion and trans­parency in the in­dus­try.

The Al­liance, which is a pres­sure group of busi­nesses and char­i­ties seek­ing re­form of the in­sur­ance sec­tor, said the mar­ket here was re­stricted.

Af­ter dawn raids last year, Euro­pean Com­mis­sion in­ves­ti­ga­tors are now prob­ing claims a new in­surer com­ing into this mar­ket has to be nom­i­nated by an ex­ist­ing player to join lobby group In­sur­ance Ire­land. Mem­ber­ship gives ac­cess to var­i­ous data­bases.

But such a sit­u­a­tion gives rise to com­pe­ti­tion con­cerns.

In­ves­ti­ga­tors from the Euro­pean Com­mis­sion seized doc­u­ments from In­sur­ance Ire­land in the IFSC in Dublin last year.

How­ever, In­sur­ance Ire­land in­sists it is fully com­pli­ant with com­pe­ti­tion law. The fo­cus of the EU probe is whether mem­ber­ship of In­sur­ance Ire­land is re­stricted.

Be­ing a mem­ber of In­sur­ance Ire­land gives ac­cess to data­bases which al­lows com­pa­nies to see in­for­ma­tion on penalty points, driver li­cences and claims his­tory.

Al­liance spokesman Peter Boland said al­le­ga­tions of re­stricted ac­cess to the in­sur­ance mar­ket were not sur­pris­ing.

“It is re­mark­able that such a valu­able mar­ket, worth over €2bn, is con­trolled by so few un­der­writ­ers, with 90pc of the mo­tor in­sur­ance mar­ket con­trolled by six com­pa­nies and 80pc of busi­ness in­sur­ance con­trolled by six also.”

He claimed the in­sur­ance in­dus­try was oper­at­ing un­der a “cloak of se­crecy” and was re­sist­ing at­tempts by the Gov­ern­ment to set up a na­tional claims data­base.

“Right now the in­dus­try in putting up fierce re­sis­tance to any el­e­ments of the new na­tional claims in­for­ma­tion data­base that would shed some light on their prac­tices, while hap­pily cherry-pick­ing the el­e­ments of the new data­base that will re­duce their costs.”

Mr Boland called on ju­nior fi­nance min­is­ter Michael D’Arcy to face down vested in­ter­ests and force the set­ting-up of the claims data­base.

And he claimed that the Cen­tral Bank was hin­der­ing con­sumers af­ter abol­ish­ing the so-called ‘Blue Book’. This meant there is now no use­able data avail­able on the in­dus­try.

In­sur­ance Ire­land de­nied it was re­strict­ing new in­sur­ers com­ing into this mar­ket.

A spokesper­son said it had never re­fused mem­ber­ship of the as­so­ci­a­tion.

In 2012, In­sur­ance Ire­land’s mem­ber­ship in­cluded 12 com­pa­nies pro­vid­ing mo­tor in­sur­ance By last year, this had in­creased to 18, it said. It said data­bases it op­er­ates were opened to non-mem­bers and mem­bers of In­sur­ance Ire­land.

“In­sur­ance Ire­land has co-op­er­ated fully with the Euro­pean Com­mis­sion in its en­quiries and is con­fi­dent its prac­tices are fully com­pli­ant with com­pe­ti­tion law,” it said.

It said the Euro­pean Com­mis­sion was in an in­for­ma­tion­gath­er­ing phase and had not made any find­ings or raised any ob­jec­tions in re­spect of mem­ber­ship of In­sur­ance Ire­land.

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