Sinn Féin Finance spokesperson Pearse Doherty TD this morning met the new Governor of the Central Bank, Gabriel Makhlouf, to discuss upcoming challenges and the practice of dual pricing by companies within the Irish insurance market. The Governor agreed to Deputy Doherty’s request for an investigation into the practice, which punishes loyal customers and vulnerable groups with extortionate insurance prices.
Deputy Doherty wrote to the Governor of the Central Bank requesting an investigation into the practice of price discrimination on 25th September, and on 16th October submitted a formal complaint to the Central Bank requesting an investigation and justifying a banning of the practice of dual pricing in the insurance market.
The Donegal TD said:
“On the 25th September I wrote to the Governor of the Central Bank requesting an immediate investigation into the practice of dual pricing, or price discrimination, by the insurance industry. I also got the agreement of the Finance Committee to investigate this practice.
“On 16th October I submitted a lengthy complaint to the Central Bank requesting an investigation into the practice and justifying a banning of the practice in the market.
“Insurance companies in the Irish market are using dual pricing to target vulnerable customers who are more likely to renew and less likely to switch or shop around, and then charge them with extortionate prices.
“Not only is this done without the knowledge of consumers, but it is known to target low-income and vulnerable groups, with some being charged premiums more than 100% higher than the average price for the same risk profile.
“In the United States dual pricing has been made illegal in as many as 17 states, including California and Florida.
“Irish consumers deserve the same protections as anyone else. But Irish regulators have done nothing to confront this practice.
“Today I met with Governor Makhlouf to discuss my complaint. This morning he agreed to carry out an investigation into the practice.
“We hope this investigation can begin immediately, with a clear and short timeline for its conclusion. I have invited the Central Bank into the Finance Committee on Tuesday 12th November
“Following an investigation we want to see the practice banned.
“The Consumer Protection Code 2012 makes clear that insurance companies should act honestly and fairly in the best interests of consumers.
“Dual pricing is practiced without the knowledge of consumers, discriminating against vulnerable groups and loyal customers, and undermining the integrity of the insurance market.
“While the Central Bank has no role in setting premium prices, it is able to ban pricing practices that are not complaint with principles of fairness and transparency.
“It is clear therefore that the Central Bank as the power to ban dual pricing. Irish consumers deserve no less.
“I welcome the Governor’s agreement to investigate this practice, and Sinn Féin will be calling for it to be banned.”