A MAJOR REVIEW into the public liability insurance market is to be carried out by the country’s competition watchdog.
The Competition and Consumer Protection Commission (CCPC) is to probe into how the market operates, how competition works in that market and whether any practice or method of competition affects the pricing levels of public liability insurance.
In response, a group representing 1,250 insurance brokers strongly refuted claims that brokers are involved in anti-competitive practices or are “in cahoots in ripping consumers off”.
Minister for Business, Enterprise and Innovation, Heather Humphreys requested the CCPC to undertake the inquiry using her powers under the Competition and Consumer Protection Act 2014.
This allows her to call for a study into a matter that impacts consumer protection or any practice of competition affecting the supply and distribution of goods or services to the public.
“The purpose of conducting this study is to bring greater transparency to the market by shining a light on the practices of insurance firms and intermediaries including brokers.”
Increase in insurance premiums
On the issue of public liability insurance, the minister stated:
“The issue of insurance for businesses, and its impact on their ability to operate, is a growing concern. In particular, the issue of increases in public liability premia for businesses is being raised with me as minister as posing a potential systemic threat to the very existence of many businesses.”
She also noted that concerns have been expressed directly to her on the roles of insurance firms and intermediaries, including brokers, in what, at times, appear to be very sharply increasing levels of public liability insurance premia.
The CCPC has the power to invite individuals to attend an interview and to provide documents or records to the CCPC.
It can also issue requests for information to individuals and undertakings, conduct market surveys, and collect and compile market information, issue questionnaires to relevant parties, and commission expert analysis.
The review will lead to recommendations which will help inform legislation and industry-led changes.
The commission has conducted a similar review of the motor insurance industry.
There has been a focus on the issue of insurance and public liability costs this year due to a number of high-profile cases, such as Fine Gael’s Maria Bailey ‘swing-gate’, as well as a number of events and businesses reporting that an increase in their premiums could shut them down.
The government has been accused of not doing enough to stem the problems, however ministers have said they are being as aggressive as they can be.
Brokers Ireland said that the suggestion that brokers are complicit in anti-competitive practices are “absurd and unfounded suggestions”.
“Premiums are set by insurers, not brokers. Public liability and all other insurance premiums are a matter for insurers,” Cathie Shannon of Brokers Ireland said.
She added that insurance brokers are “as frustrated as their clients” about the rising costs to individuals and businesses.
No silver bullet
“The study forms part of the Government-wide response to tackling the cost of insurance. There is no silver-bullet solution to this issue but we are committed to ensuring that we are using every lever available to us to ease the pressure on businesses and consumers,” said Humphreys.
The minster has requested the CCPC, which is independent in the exercise of its statutory functions, to complete the study as a matter of priority.
The Explainer / SoundCloud
To embed this post, copy the code below on your site
have your say