Six insurance providers have given the Competition and Consumer Protection Commission (CCPC) legally binding commitments to implement changes aimed at ensuring compliance with competition law.
The six – AIG Europe, Allianz, AXA Insurance, Aviva Insurance Ireland, FBD Insurance and AA Ireland – had been under investigation by the competition watchdog for price-signalling in the motor-insurance market.
The watchdog had been concerned about public statements, made by several parties in the sector, that appeared to be forecasting with confidence that premiums would rise. Such communications about pricing are a breach of competition law.
As a result, the CCPC began a five-year probe that resulted in the commitments given today (20 August)
The competition body also said that it had written to the Central Bank, outlining “broader cultural concerns” in the insurance industry that had come to light during its investigation.
“The CCPC is in no way giving the industry a clean bill of health,” said commission member Brian McHugh.
Mr McHugh added that the CCPC did not accept that adequate measures to comply with competition law had been in place in these businesses.
“Robust compliance programmes would have identified and flagged the behaviours of concern that were under investigation,” he said.
Brokers Ireland refuses
The commitments given by the six insurers require them to implement several measures, including:
- An internal monitoring mechanism to detect, identify and report suspected breaches of the compliance programme,
- A mechanism for employees reporting suspected breaches, and protection for the employee that comes forward,
- Appointment of a compliance officer, who must report to the board of the organisation,
- Regular competition-law training on pricing practices, and communications that are not permitted under the law,
- Independent expert oversight of the compliance programmes – including various auditing and reporting requirements,
- An annual submission to the CCPC demonstrating conformity with the commitment.
The CCPC’s preliminary findings had also raised concerns about the conduct of the Irish Brokers' Association, one of the two associations that amalgamated to form Brokers Ireland.
The organisation has, however, refused to give similar commitments on compliance measures.
“The fact that Brokers Ireland did not enter into legally binding commitments, in the CCPC’s view, arguably calls into question the organisational attitude towards compliance,” said Mr McHugh.
The Government welcomed the announcement, with the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar describing it as “a good outcome”, and welcoming the CCPC’s follow-up with the Central Bank.
“The main thing we need to see now is a fall in premiums for motorists,” he said.
The Tánaiste added that the upcoming Competition (Amendment) Bill would significantly strengthen the CCPC’s powers, giving it the ability to administer “significant fines” for breaches of competition law.