15 Aug 2019 | 08.59 am
Insurance Brokers Set For Competition Probe
Minister orders CCPC inquiry into public liability insurance market
15 Aug 2019 | 08.59 am
Business minister Heather Humphreys has requested the Competition and Consumer Protection Commission (CCPC) to undertake a study into the public liability insurance market.
In her request, the minister asked that the study should examine “how that market operates, how competition works in that market and whether any practice or method of competition affects the pricing levels of public liability insurance within that market”.
The minister added: “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. 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.”
Humphreys (pictured) also noted that concerns on the roles of insurance firms and intermediaries including brokers in what appear to be very sharply increasing levels of public liability insurance premia.
“The study forms part of the government-wide response to tackling the cost of insurance,” Humphreys added. “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.”
Reacting to the announcement, Brokers Ireland refuted claims that insurance brokers are involved in anti-competitive practices.
“These are absurd and unfounded suggestions,” said Cathie Shannon, Director of General Insurance at the organisation, which represents 1,250 broker firms. “Premia are set by insurers, not brokers. Public liability and all other insurance premia are a matter for insurers. Insurance brokers are as frustrated as their clients on the rising costs to individuals and businesses.”
When performing its functions under the Competition and Consumer Protection Act 2014, the CCPC can gather information in a number of different ways, such as:
– invite individuals to attend for interview by CCPC staff
– request individuals to provide documents or records to the CCPC
– issue requests for information to individuals and undertakings
– conduct market surveys, and collect and compile market information
– issue questionnaires to relevant parties
– commission expert analysis.
The CCPC says its approach is to gather information on a voluntary basis but it reserves the right to consider the use of its full suite of statutory powers should co-operation not be forthcoming.
The CCPC also stressed that it is not investigating a breach of competition law in the public liability insurance market. “The CCPC is independent in the exercise of its enforcement functions. It cannot be directed to investigate suspected breaches of competition law in any particular sector or by any particular set of economic operators,” the Commission stated..
“The study is in the early stages, and once the Terms of Reference have been finalised the CCPC will undertake an extensive process of engagement with all relevant stakeholders.”