The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1) (Insurance Requirements) Regulations 2022 apply to insurance undertakings and insurance intermediaries from 1 July 2022.
Ban on price walking in motor and home insurance comes into effect on 1 July 2022.
The Central Bank is banning a practice known as “price walking.” Price walking is where you are charged a higher premium the longer you remain with your insurer, and for no reason other than staying with the same provider. Banning price walking ends the “loyalty penalty” insurance customers can experience for staying with an insurer. As of 1 July 2022, when you renew your home or motor insurance for the second time or more, your insurer can no longer charge you more than someone who is renewing for the first time, and has a similar risk profile and cost of service to you.
Review of pricing policies and processes
Providers of motor and home insurance will have to review their pricing policies and processes annually. This will ensure insurance providers focus on pricing practices and the impact these practices may have on customers, while also ensuring adherence to new pricing provisions and the fair treatment of consumers.
Automatic renewal process
If your home or motor insurance policy renews automatically, you will now be given additional information that will be consistent across insurance providers. This will help you make more informed decisions when renewing your insurance, and prompt you to consider if your insurance policy continues to serve your needs and whether you should think about switching to another provider.
New customer discounts not affected
The Central Bank identified differential pricing as a growing consumer risk in its annual consumer Sectoral Risk Assessment process. As a result, it undertook a comprehensive review to assess how differential pricing is used in the motor and home insurance markets in Ireland and its impact on consumers. The principal conclusion from this review was that the practice of price walking could result in unfair outcomes for some consumers in the motor and home insurance markets. In addition, insurance undertakings and insurance intermediaries will be required to carry out an annual review of motor and home insurance pricing policies and processes to ensure sound practices.
The Regulations set out the information that must now be provided to consumers in advance of the automatic renewal of an insurance policy, including the right to cancellation. This is another measure to encourage consumers to consider the potential benefits of switching and to increase consumer awareness of the options available to them at renewal time.
Attribution: https://www.centralbank.ie/
