08 Aug 2022

Laois-Offaly TD wants laws to stamp out insurance rip-offs

Laois-Offaly TD wants laws to stamp out insurance rip-offs

Laois-Offaly TD wants laws to stamp out insurance rip-offs

Sinn Féin has published legislation to ban dual pricing from the insurance market and empower the Central Bank, courts and Financial Ombudsman to enforce new laws.

Local TD Brian Stanley said, “Sinn Féin has long called for a ban on this practice. Last year we submitted 130 pages of complaints to the Central Bank and demanded that they investigate dual pricing, which they have now done. This found that the majority of customers are paying significantly more than the expected cost of their policy, with some overcharged up to 35%.

"The Insurance (Restriction of Differential Pricing and Profiling) Bill 2020, which Sinn Féin has published, is a landmark moment for the insurance market. This legislation will ban dual pricing, reduce premium costs and increase fair competition.

"Dual pricing involves insurers using data and complex pricing practices to target customers who are less likely to shop around, before charging them artificially high premiums at renewal. This disproportionately impacts on older and more vulnerable customers.

"The Interim Report by the Central Bank on the use of dual pricing by companies is a shocking indictment of the industry and how customers are ripped off. It has found that renewing customers are paying significantly more than the actual cost of their policy and this affects more than 70% of them.

"The report shows that 2.5 million policyholders are paying a total of €187 million more than the actual cost of their policies as a result of dual pricing. In motor insurance, customers are being overcharged by as much as 25%; while in home insurance customers are overcharged up to 35%. In Britain, an investigation found 6 million policyholders were overcharged in 2018. That is why the British regulator is banning dual pricing.  

"The Sinn Féin legislation would result in significant savings for customers," Deputy Stanley claimed.

"It will also require insurers to inform customers of the factors they have used to calculate their premiums at renewal. This legislation will require the Central Bank to regulate the ban on dual pricing, and publish a Code of Practice that will assist both the Courts and the Ombudsman where an insurance company has broken these new laws.

"The plan recently announced by Government to reduce insurance costs, while containing some positive measures, fails to commit to putting laws in place to stamp out the dual pricing rip off. Legal penalties are the only effective remedy.

"Sinn Féin vowed to end the rip-off by the insurance industry. We are following through on this and hope that all other parties support us”

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