Central Bank to report on price walking ban within six months
A report assessing the impact of a new ban on “price walking” in the Irish motor and home insurance markets will be produced by the Central Bank within six months.
Under regulations which came into effect from 1 July 2022, Ireland became the first EU country to ban price walking, whereby renewing customers are charged a higher premium than an equivalent year one consumer renewing their policy.
The government has now commenced the majority of provisions of the Insurance (Miscellaneous Provisions) Act 2022, with immediate effect, which includes a requirement for the Central Bank to assess the ban’s impact.
Seán Fleming, minister of state with special responsibility for financial services, credit unions and insurance, said: “Today’s commencement of the key provisions within the Insurance (Miscellaneous Provisions) Act 2022 represents an important consumer protection enhancement, and complements government’s ambitious insurance reform agenda.
“In particular, the Central Bank of Ireland is now required to provide a timely assessment of its price walking ban, a new pro-consumer measure, the first of its kind in the EU. Price walking, effectively a ‘loyalty penalty’, is where customers are charged higher premiums relative to the expected costs the longer they remain with an insurance provider.
“Central Bank research shows customers who have stayed with their insurance provider for nine years or more, are paying, on average, 14 per cent more for private car insurance and 32 per cent more on home insurance. There are currently 2.2 million private motor and 1.3 million home insurance policy holders around the country.”
He added: “Other elements within the Act provide a legislative basis for the collection of data by the Central Bank on State supports deducted from claim settlements in its National Claims Information Database, bringing welcome clarity to this issue. The Act also protects consumer interests by enabling some UK firms provide service continuity to existing Irish policyholders.”