Committee 'unhappy' with insurers' premiums

An Oireachtas committee investigating ways to reform the insurance market has said it is "unhappy" with industry explanations on why premiums are so high.

The Joint Committee on Enterprise and Small Business claimed it had been "misled by presentations" from motor insurance companies on the profitability of the market and that it was not getting the full story.

A week ago, the industry announced record profits of €183 million on motor cover.

Today the committee published an interim report containing 40 recommendations aimed at reducing premiums.

One of the main recommendations is that the Government should abolish its two per cent levy on premiums and that the insurance firms should provide cheaper premiums in return.

The committee, which estimates that there are least 80,000 uninsured cars on Irish roads, wants sanctions for breaches to compulsory motor insurance obligations to be introduced. In particular, it wants uninsured vehicles to be confiscated.

The committee has also called on the Government to establish an expert group to compare the levels of awards in the Irish courts with other jurisdictions. The group would then recommend awards appropriate to Ireland that interested parties, namely victims and judges, could use as a guide.

The report also recommends penalty points be extended to all motoring offences affecting road safety as soon as possible.

It rejected the notion that speed cameras should be operated by private companies, instead recommending the operation stay in the hands of the gardaí as only they had the power to stop speeding motorists.

The committee's chairman, Fianna Fáil's Mr Donie Cassidy, said: "It is clear that there is insufficient competition in the Irish insurance market.

"As we are in the single European insurance market we do not understand why there are so few companies competing for business in the Irish market," he said.

Mr Cassidy said the committee wants the measures recommended in the report implemented by January 2004 so that the benefits can be available to policy holders next year.

"From insurance companies, we want substantial premium reductions. The joint committee will continue its work until this is achieved," he added.