Insurer “concerned” about regulatory environment – Low Calorie Diets Tips

The chief executive of the insurance industry’s representative body has said there are serious concerns about the sustainability of the regulatory environment in Ireland.

Moyagh Murdock said the government and central bank need to assess the potential impact of regulation on competition.

“As the market continues to grow, there are serious concerns about the sustainability of our regulatory environment and its ability to attract new incremental investment into Ireland and maintain Ireland’s competitiveness,” she told attendees at Insurance Ireland’s annual luncheon.

“The increasing regulatory burden in Ireland and in particular any deviation from the EU’s single regulatory approach jeopardizes our future success.”

“Insurance Ireland has raised with the Government and Central Bank the need to assess Ireland’s specific regulatory burden and the potential impact on competition.”

Ms Murdock added that transparency, predictability and proportionality are key to retaining existing suppliers and attracting new players to the market here.

The industry chief also said that while the government’s plan for a pension system with automatic registration is very welcome, it needs further reflection to avoid infrastructure duplication.

She said the principles of the system outlined so far are that the individual’s relationship will be with the central processing agency and the role of four registered providers will be simply to act as fund managers for the agency

“This will likely require building a complex and costly infrastructure from the ground up,” she said.

“Life insurance companies have been providing annuities and retirement planning in Ireland for decades. They already have a tried and tested infrastructure that could be easily and inexpensively leveraged to provide low cost auto enrollment.”

Ms Murdock added that the introduction of automatic registration in its current form is a missed opportunity to tackle the gender pension gap if it does not include changes or the removal of income limits.

However, Ms Murdock also commended the progress made in insurance reform, including the introduction of new personal injury guidelines and their application by the Personal Injuries Assessment Board.

She said the latest data showed progress made in reducing costs in the car market, with premiums in early June matching those of last June 2013.

“While inflationary pressures are a significant concern, I believe the trends over the past 18 months are clear evidence that the benefits can be reaped from a collective approach,” she said.

Ms Murdock also explained that the insurance industry will do its part to find solutions to climate change, but those solutions require a collaborative approach.

“The transition to a sustainable economy and society requires more than just our commitment,” she told the audience.

“It will need a clear plan from the government on how to manage the change and identify concrete actions needed.”

Gabriel Makhlouf also spoke at the event

The central bank governor also addressed the gathering and said the regulator expects insurers to work hard to introduce new rules to differentiate pricing by July 1.

Gabriel Makhlouf said the bank’s latest consumer protection outlook outlines how bad practices may seek to exploit vulnerabilities in consumer behavior, with the widespread use of differential pricing in the car and home insurance markets resulting in consumers being charged for their loyalty would be asked.

Mr Makhlouf said higher rates of inflation due to rising labor and material costs are already affecting the cost of settling some non-life claims and this could hurt profitability.

“The impact of inflation on liability policies poses the greatest risk to profitability as claims can be settled many years after premiums have been paid,” he told the gathering.

“However, the adverse impact of inflation on some businesses and on insurance costs may be partially mitigated by the positive impact of higher interest rates on investment returns, as well as changes in the domestic personal injury claims environment.”

The governor also highlighted how the central bank’s work has identified areas where oversight of intergroup relationships in the insurance sector needs to be strengthened by a number of firms.

“The risks associated with reliance on related group companies are often not adequately addressed, possibly due to intra-group arrangements which some perceive as ‘less risky’ than external arrangements,” he said.

On climate change, the Governor said central banks, including the Central Bank of Ireland, cannot solve the climate change problem alone.

“The challenge requires action from across the community, businesses, households and the entire financial system, as well as policymakers,” he said.

“The insurance industry is at the forefront of physical risk and is really important to the transition given its role in channeling savings to support investment.”

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