Seán Sherlock TD, Labour Spokesperson on Public Expenditure, has pushed on insurance watchdogs for plain answers to the question of increased premiums for consumers around North Cork.
Deputy Sherlock was questioning the Consumer and Competition Protection Commission (CCPC) at the Finance and Public Expenditure Oireachtas Committee, which is investigating the issue of raising insurance costs.
“The Commission used the analogy of the smoke-filled rooms,” said Deputy Sherlock on the allegation of price cartels. “If one fast-forwards to modern language, it is air-conditioned rooms in glass towers, on the 15th floor, but it is the same type of behaviour, where an influence is being brought to bear on the market in the context of pricing.
“Whatever way one parses the language, what Mr (Patrick) Kenny (of the CCPC) is essentially telling us, on behalf of a statutory agency or body, is that there is a concern about cartel-like behaviour. Let us not be too prescriptive on the word ‘cartel’ as Mr Kenny has elucidated it to us.
“That is de facto cartel-like behaviour, where one is influencing the price determination for a project.”
Deputy Sherlock also highlighted the issue of data transparency between the insurance companies and the lack of access to that data. “We know what the Injuries Board pays out, but there is a whole indeterminable figure that we do not know in respect of settlements. We do not know the true cost of settlements because there is not perfect knowledge.
“If the CCPC is investigating this without having access to the three so-called databases, it could be argued – correct me if I am wrong – that it is on the back foot in respect of this investigation. If it does get access to that data, what can it do to assure consumers that their premiums will reduce as a result? I have been using the following analogy for the past few days: if my insurance premium has gone from €500 to €800, which is a €300 increase, what proportion of that €300 increase is reprovisioning or rebalancing?” he asked.
In response, Patrick Kenny of the CCPC told Deputy Sherlock that there may be a number of factors pushing premiums up. “People may decide independently and perfectly in compliance with competition law and that may still continue. What we are after is the degree to which in any market signalling accelerated or exasperated a given price increase. That is where we come in for this purpose,” he said.
Deputy Sherlock stressed that it was important for simple answers on the questions to be given. “The Competition and Consumer Protection Commission is going in now to take a look at the insurance sector, as it relates to motorists. That will give people some degree of comfort, but it will only give them comfort if they know there is an outcome that results in a reduction in premium prices.”
