SINN FÉIN FINANCE spokesperson Pearse Doherty has said it’s “not good enough” that no insurance companies have been taken to court by the consumer watchdog over allegations of anti-competitive practices.

This morning, the Competition and Consumer Protection Commission (CCPC) announced the conclusion of an investigation into breaches of competition law by motor insurers between 2015 and 2016.

Six firms — AIG Europe S.A., Allianz PLC, AXA Insurance DAC, Aviva Insurance Ireland DAC, FBD Insurance PLC and AA Ireland Limited — agreed to sign up to reforms on foot of the probe.

It brings to a conclusion a five-year investigation into ‘price signalling’ among insurers, a practice whereby a business makes its competitors aware that it plans to hike prices. 

This can have the effect of increasing prices — in this case, car insurance premiums — across the industry.

Although six firms made legally binding commitments to implement new internal compliance regimes, each firm denied that they were in breach of competition law.

No insurer was taken to court to determine whether the alleged breaches took place.

But “the CCPC is in no way giving the industry a clean bill of health”, Brian McHugh, Member of the Commission with responsibility for Competition Enforcement and Mergers said today.

The watchdog has now written to the Central Bank of Ireland outlining its concerns about the culture of the industry, he said.

Speaking on RTÉ’s Morning Ireland programme, Doherty said, “It’s disappointing because the signal that it sends out to the insurance industry is that the risk of doing this is worth it”.

He said that during the period in which car insurers were being investigated for price signalling, “average premiums increased by 35% in those two years when at the same time, the average cost of claims was actually reducing for the insurance companies.

“But notwithstanding that there, were signals given to the market by competitors that prices were going to go up, and lo and behold prices did go up at the highest rate in the last decade.”

Under the current competition law regime, the power to make decisions on breaches of competition law is reserved for the courts.

“This means that there are also no civil or administrative fines for breaches of competition law, and the CCPC cannot operate a leniency program,” the watchdog said in a statement this morning.

However, the CCPC noted that this is set to change later in the year with the Government’s proposed Competition (Amendment) Bill 2021.

If passed, the legislation will give the watchdog more power to enforce competition law.

In a statement this afternoon, Tánaiste and Minister for Enterprise Leo Varadkar welcomed the outcome of the investigation and said the legislation is a priority for government this year.

“The new law will significantly strengthen the CCPC’s powers, giving them the ability to administer significant fines for breaches of competition law,” he said.

“We will continue to implement our Insurance Reform Plan, which is already making an impact on costs.”

But Doherty criticised the Government for failing to meet a European Union deadline to implement the new regime earlier this year.

“They haven’t even published the legislation and still we’re only dealing with the heads of the bill,” the Donegal TD said.

“So it sends a very, very bad signal out to consumers and sends a very clear signal to the likes of insurance companies… [that] it’s not something that the government have taken series over the last decade.”

With reporting by Jane Moore