Galway TDs are being called on to support a new Bill aimed at reducing insurance costs by banning the practice of ‘dual pricing’.
The Bill is being brought before the Dáil today by Sinn Féin Galway West TD, Mairead Farrell, who said it can “stop insurance companies penalising and ripping-off loyal customers”.
‘Dual pricing’ is used by insurance companies to identify loyal customers and charge them artificially high premiums. The practice affects millions of policyholders, costing many customers hundreds of euro per year on car and home insurance.
In the past decade insurance costs have risen by 35 per cent despite the cost of claims falling by nine per cent. ‘Dual pricing’ is banned in 20 US states and is soon to be banned in Britain. In Britain, the financial regulator estimates that a ban on dual-pricing would cut insurance costs for customers by 10 per cent, saving customers billions over the next decade.
The Bill will require the Central Bank to draw up and enforce regulations that will govern the ban. Any insurance company which ignores the ban will face heavy sanctions. The Bill will also require insurers to tell customers exactly how their premium had been calculated.
“This Bill will put money back in the pockets of motorists and homeowners by reducing their premiums,” said Dep Farrell. “Insurance costs in Ireland are far too high and it is time to ensure customers are treated fairly. The insurance industry will fight against this Bill. We must ensure that it passes, so I am calling on all TDs from all parties to back it.”