Government to ‘significantly strengthen’ competition watchdog’s powers

Alliance for Insurance Reform says neither CCPC nor Central Bank is ‘fit for purpose’

Minister for Finance Paschal Donohoe and Tánaiste Leo Varadkar

Minister for Finance Paschal Donohoe and Tánaiste Leo Varadkar


The Government has pledged to “significantly strengthen” the powers of the Competition and Consumer Protection Commission (CCPC) by the end of the year following the completion of the watchdog’s investigation into the motor insurance industry.

The pledge comes as an insurance reform group said neither the CCPC nor the Central Bank are “fit for purpose” in terms of the investigation and Sinn Féin said the CCPC’s decision not to take legal action against insurance companies was “a deeply disappointing blow to consumers”.

Motor insurers AIG, Allianz, Axa, Aviva, FBD and broker AA Ireland have pledged to reform compliance on foot of a CCPC inquiry into allegations that industry players were “signalling” price increases to each other.

The companies’ deal with the commission is meant to boost competition among motor insurers, potentially leading to lower premiums for drivers.

Tánaiste Leo Varadkar welcomed the outcome of the CCPC’s investigation on Friday, as well as the commitments entered into by the parties to the investigation.

“This is a good outcome from the CCPC today and I welcome the fact that they are following up further with the Central Bank,” he said.

“The main thing we need to see now is a fall in premiums for motorists. The upcoming Competition (Amendment) Bill is a priority this year for Government, as part of our overall commitment to reform the insurance sector.

“The new law will significantly strengthen the CCPC’s powers, giving them the ability to administer significant fines for breaches of competition law. We will continue to implement our insurance reform plan, which is already making an impact on costs”.

The CCPC said it had written to the Central Bank highlighting concerns about the industry’s culture and the repeated interventions needed to address issues in the sector.

The Central Bank said on Friday it had received the CCPC’s letter “on their investigation into suspected anti-competitive practices in the provision of private motor insurance in the State”.

“We will consider the report, when published, and the communication from the CCPC,” it said.

“We welcome the CCPC’s engagement in relation to culture. As noted in the Central Bank’s 2021 Consumer Protection Outlook Report, behaviour and culture remains a key priority for the Central Bank, where we continue to drive firms to embed effective consumer-focused cultures.”

Not ‘fit for purpose’

Alliance for Insurance Reform spokesman Peter Boland said it appeared that neither the CCPC nor the Central Bank were “fit for purpose” in terms of the investigation.

“There are several aspects of this investigation which illustrate that the State, if anything, protects motorists even less than other consumers,” he said.

“The CCPC investigation took five years. Many of the senior people involved will have retired or moved on at this stage so the findings are barely relevant.

“The attitude of Brokers Ireland to the CCPC’s analysis and recommendations illustrates both how heedless insurers are of their consumers and how toothless the CCPC is in the face of such disdain.”

He added that concerns raised by the CCPC with the Central Bank in relation to culture is “of little value given the Central Bank’s track record of prioritising the financial stability of the sector ahead of consumer protection”.

Sinn Féin finance spokesman Pearse Doherty said the decision by the CCPC not to take legal action against insurance companies was “a deeply disappointing blow to consumers”.

He said the announcement underlined “a rotten culture” at the heart of the industry and “a Government that has enabled that culture to thrive unopposed”.

“The decision by the competition authority not to take legal action, after a five-year probe into the insurance industry for illegal and anti-competitive pricing practices that harm consumers, is deeply disappointing,” he said.

“In its preliminary findings, the CCPC made clear that it had reasonable grounds to suspect that competition law had been broken between 2015 and 2016, a period in which motor insurance premiums rose by an astonishing 35 per cent.

“Despite this, and the time and resources that have gone into this probe in the past five years, the competition authority has chosen not to take legal action.

“This is a disappointing blow for consumers, which provides cover for the insurance industry.”

Mr Doherty said the insurance industry has “repeatedly undermined and ripped off consumers”.

‘Positive result’ for consumers

Minister for Finance Paschal Donohoe said that securing a more sustainable and competitive market through “deepening and widening the supply of insurance in Ireland” is a key policy priority for the Government.

“In this regard, the Government will continue to work to ensure that implementation of the action plan will have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland,” he said.

Minister of State with responsibility for Insurance Seán Fleming plans to meet the CCPC to discuss its findings in further detail.

He said the Cabinet committee subgroup on insurance reform’s first action-plan implementation report showed that work was progressing well, with 34 of the 66 actions now completed.

Minister of State with responsibility for company law Robert Troy said the CCPC investigation was “a positive result” for consumers, and that the new law would be published within months.

“Competition is important for a healthy insurance market and later this autumn we will publish the Competition (Amendment) Bill,” he said.

“This is one of my top priorities for company regulation, and represents a step change in competition enforcement for Ireland and will support ongoing work to ensure a competitive and fair marketplace.

“Government is making steady progress to reform the insurance market and we are beginning to see the results of this work to ultimately reduce the cost of insurance for businesses and consumers alike.”

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