A ban on ‘price walking’ in the motor and home insurance sectors will come into effect this July.
This means that from July 1 insurance providers cannot charge relevant renewing customers a premium higher than they would have charged an equivalent year one consumer renewing their policy.
The Central Bank published the new regulations and said the move would ensure the market is fairer, and that new customer discounts would still be allowed.
In addition, insurers and brokers will be required to carry out an annual review of motor and home insurance pricing policies and processes to ensure fair practices.
Price walking or dual pricing is where loyal policyholders are charged more at each annual renewal date even though the risk to the insurance company is the same.
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.
The Central Bank added that this was 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.
Derville Rowland, director general of the Central Bank, said these new regulations would “significantly enhance” the consumer protection framework.
“This will benefit consumers by removing the loyalty penalty for consumers of long tenure while preserving competition in the market,” she said.
“The publication of these measures does not bring to a close our consumer protection work in the insurance sector.
“We will continue to engage with insurance providers to ensure work in relation to oversight of pricing practices is undertaken.
The bank would also monitor developments in the private motor and home insurance markets to better understand customer engagement in the market and how it might be improved and to ensure that firms are acting in the best interest of consumers and delivering fair outcomes, Rowland added.
The Central Bank (Supervision and Enforcement ) Act 2013 (Section 48(1 ) ) (Insurance Requirements ) Regulations 2022 will apply to insurance providers and brokers from July 1, 2022.
