By Michelle Devane, PA
The Government will look at proposals forcing insurance companies to pass on savings made from lower injury awards to its customers, the Dáil has heard.
Tánaiste Leo Varadkar said legislation requiring insurance companies to pass on savings in the form of reduce premium costs was a “sensible” idea.
Mr Varadkar made the remarks during Leaders’ Questions in response to Sinn Féin’s Pearse Doherty who urged the Government to force the industry to do the right thing.
New personal injury guidelines have been introduced limiting awards for people who go to court, but Mr Doherty said the industry cannot be trusted to reduce premiums for its customers.
“They shouldn’t be trusted at face value,” the Sinn Féin finance spokesman said.
“This Dáil cannot provide them with huge savings, and then cross our fingers and hope that these savings will be passed on in full to their customers.
“At present that is exactly what we’re doing with the new personal injury guidelines.
“The industry can and should be held to account to ensure they pass on the savings in full to their customers.”
Reductions in insurance claims must be passed on to customers.
Insurance companies must be forced to show what savings are being passed on or it won’t happen. It’s time to end the insurance rip off – @PearseDoherty #Dáil pic.twitter.com/rxKX9PRPDX
— Sinn Féin (@sinnfeinireland) May 27, 2021
The Donegal TD urged the Government to follow in the footsteps of the UK which passed legislation to ensure the industry was required to pass on savings “pound for pound” to their customers after the level of awards were reduced there.
“The insurance industry here should be subject to the exact same level of scrutiny,” Mr Doherty said.
“So, I argue very strongly that we need the same type of oversight here.
“We need to ensure that pound for pound, euro for euro, that savings that will be made by the industry as a result of the dramatic cuts in awards are passed on to their customers.”
The Fine Gael leader said Mr Doherty’s proposal was “worthy of consideration” and that the Government would be happy to examine legislation he had drawn up.
“It sounds like a sensible proposal,” he said.
Mr Varadkar added that the Government had already embarked on a major reform of the insurance sector in Ireland and that the new personal injury guidelines had already resulted in reduced awards in court.
“As rewards have been reduced we now expect premiums should also be reduced,” he said.
“That’s logical and it’s also the commitment that the industry made.”
He added that Junior Minister for Finance Sean Fleming had begun meeting with the chief executives of insurance companies to “impress upon them” the need for savings from lower insurance awards to be passed on to the customer in the form of lower premiums.
“The reason why we made these changes was so that insurance would become more available and more affordable for motorists for homeowners and for businesses, as these reforms are now happening.
“They’re now being realised.
“We expect the insurance industry to do what it is supposed to do, to do what it said it would do, and that is to reduce premiums.”