Press release
Minister of State Fleming publishes the Insurance (Miscellaneous Provisions) Bill 2022
Published on
Last updated on
Published on
Last updated on
Following agreement from Cabinet, the Minister of State with responsibility for Financial Services, Credit Unions and Insurance, Seán Fleming, has published the Insurance (Miscellaneous Provisions) Bill 2022.
The main provisions of the Bill will provide for the following:
a) Require the Central Bank of Ireland to collect data through the National Claims Information Database (NCID) on any deductions from claim settlements by insurers that relate to public moneys (i.e. ‘State supports’).
b) A new requirement on the Central Bank of Ireland to submit a report setting out the effectiveness of the ban on ‘price walking’, - an effective ‘loyalty penalty’. The ‘price walking’ ban will begin in July. This report will be delivered to the Minister for Finance within an 18-month timeframe from the enactment of this provision.
c) A new requirement on insurers, under the Consumer Insurance Contracts Act 2019, to disclose to consumers any deductions of public moneys from insurance claim settlements.
d) Amendments to the Consumer Insurance Contracts Act 2019 in order to address some technical and legal issues.
e) In the interests of Irish consumer protection, amendments to the European Union (Insurance and Reinsurance) Regulations 2015 to address issues identified by the Central Bank of Ireland with the Temporary Run-off Regime (TRR) for UK and Gibraltar-based insurers.
Welcoming the publication, the Minister of State with responsibility for Financial Services, Credit Unions and Insurance, Seán Fleming, said:
“The Central Bank of Ireland’s new ‘price walking’ ban makes Ireland the first country in the EU to end the unfair ‘loyalty penalty’ imposed on private motor and home consumers. As part of this Bill, the government will receive a report from the Central Bank of Ireland on the effectiveness of the ban on ‘price walking’. This will allow us to proactively plan if further action is needed to tackle unfair pricing practices.
"This Bill will also shine a light on insurers deducting State supports from claim settlements, as seen during the COVID-19 pandemic. Significantly, the Bill is demanding transparency by requiring insurers to disclose deductions to consumers. In addition, the Bill will require the Central Bank of Ireland to collect data on State support deductions. This means that the government will have evidence and will be better-placed to consider any future policy intervention to protect taxpayer money.
"I now look forward to working with colleagues in both Houses to progress this legislation so that these important provisions can be enacted promptly."
The Insurance (Miscellaneous Provisions) Bill 2022 seeks to address several insurance-related issues that have come to light since the Action Plan for Insurance Reform was published in December 2020, including the practice of insurers deducting State support payments from COVID-19-related claim settlements. In this regard, the Bill introduces a new requirement for insurers to inform consumers of any State supports they deduct from claim settlements, and furthermore enables the Central Bank of Ireland to collect data on such deductions through the National Claims Information Database (NCID). This will enhance transparency around this issue and help to better-inform policymakers to address it in future situations.
The Bill also creates a new requirement on the Central Bank of Ireland to report to the Minister for Finance about any steps it takes to address the practice of ‘price walking’, following the Bank’s Review of Differential Pricing in the Private Car and Home Insurance Markets, and subsequent Regulations to ban 'price walking’ from July 2022. In addition, the Bill provides for technical amendments to the Consumer Insurance Contracts Act 2019 in order to clarify certain issues that arose following the enactment of this legislation. Also in the interests of Irish consumer protection, it amends the legislation underpinning the Temporary Run-off Regime for UK and Gibraltar-based insurers, which was established following the UK’s withdrawal from the EU, to rectify technical issues with the scheme that have been identified by the Central Bank of Ireland.
The Bill will provide for the following:
a) Amendments to the Central Bank (National Claims Information Database) Act 2018 to enable the Central Bank of Ireland to collect data through the National Claims Information Database (NCID) on any deductions from claim settlements by insurers that relate to public moneys (i.e. State supports);
b) A new requirement on the Central Bank of Ireland to submit a report to the Minister for Finance setting out the steps it has taken since regulating the practice of ‘price walking’. ‘Price walking’, also known as a ‘loyalty penalty’, is a form of differential pricing where customers are charged higher premiums relative to the expected costs the longer they remain with an insurance provider. The Bill will provide for this report to be submitted within an 18-month timeframe from enactment of this section, and to be laid before the Houses of the Oireachtas upon receipt;
c) A new requirement on insurers, under the Consumer Insurance Contracts Act 2019, to disclose to consumers any deductions of public moneys from insurance claim settlements (with the exception of those made under the Recovery of Benefits and Assistance Scheme operated by the Department of Social Protection);
d) Amendments to the Consumer Insurance Contracts Act 2019 in order to address technical and legal issues that arose following the initial enactment of this legislation. These will provide clarity and ensure that the objective of the Act is achieved;
e) To protect existing Irish policyholders, amendments to the European Union (Insurance and Reinsurance) Regulations 2015 to address issues identified by the Central Bank of Ireland with the Temporary Run-off Regime (TRR) for UK and Gibraltar-based insurers. The TRR was established in light of the UK’s departure from the EU, after which these insurers lost the ability to write new business in EU Member States. These amendments will provide for technical changes in order to ensure that certain insurance firms that provide reinsurance, and firms in liquidation, can use the TRR to run-off their existing Irish insurance contracts.
The Bill will now be progressed through the legislative stages in the Oireachtas.