Central Bank insurance transparency rules kick in
Customers are entitled to increased transparency when buying insurance products under new Central Bank rules introduced today.
Insurers must now provide more information on renewal of motor insurance, including the premium paid in the previous year.
The renewal notification period has also been increased to give policyholders more time to consider options.
The aim is to help customers to make a more informed decision when purchasing insurance.
Amendments
The rules are part of the amendments to Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No.74).
Insurers must now provide individual policyholders with details of the premium paid for private motor insurance renewals in the previous year, in order to improve transparency. This information must feature prominently on the same page as the renewal premium.
The Central Bank also requires all motor insurers to provide a quotation for each policy option available to the customer such as comprehensive, third party fire and theft cover, or third party only.
Notification period
In addition, insurers must also extend the renewal notification period from 15 to 20 working days for motor, health, damage to property and general liability insurance, to allow policyholders more time to seek comparison quotes.
Gráinne McEvoy, director of consumer protection, said: “These new Central Bank rules will help consumers make better informed decisions when shopping around for their insurance policies.
'Significant outlay'
“Motor insurance in particular can represent a significant outlay for many people, so these changes will help people to shop around and make informed choices.
“We are insisting that insurers put the price comparison on the same page of any renewal notice. This makes it easy for customers to see if their premium has increased. We expect the insurance sector to embrace these rules, in the best interest of their customers.
“And the Central Bank will closely monitor their compliance.’’
The amendments require insurers to:
- Provide the amount of the insurance premium paid in the previous year for private motor insurance renewals or, where any mid-term adjustments were made to the policy during the year, an annualised premium figure,
- Provide the total premium for each policy option for motor insurance available for the customer in renewal notices (ie, comprehensive; third party fire and theft cover, and third party only (if provided by the insurer)), and
- Extend the renewal notification period from 15 working days to 20 working days for motor insurance and all other relevant non-life insurance classes covered, which includes:
- accident and health insurance,
- insurance against fire and other damage to property, and
- general liability.
In July 2016, the Government established the Cost of Insurance Working Group (CIWG), the objective of which was to identify and examine the drivers of the cost of motor insurance and to recommend short, medium- and longer-term measures to address these issues.
- The CIWG Report on the Cost of Motor Insurance was published by the Department of Finance in January 2017.
- The Central Bank was represented on the CIWG, along with the Departments of Finance, Jobs, Enterprise and Innovation, Justice and Equality, and Transport, Tourism and Sport, the State Claims Agency and the Personal Injuries Assessment Board.
- The Central Bank sought the views of stakeholders on these proposals in two Consultation Papers issued in November 2017 and August 2018.