Insurance 'shrouded in secrecy' - claim

28 December 2001: The motor insurance industry has been accused of being 'shrouded in secrecy', operating a cartel and ripping off young drivers.

In one of the hardest hitting attacks on any sector, the special Oireachtas committee on enterprise and small business lambasted its activities.

No doubt acutely conscious of the car cover costs facing young people in particular, the politicians also accused the insurance companies of not cooperating with the Motor Insurance Advisory Board (MIAB).

The same board has already published a swingeing, damning report on motor insurance costs.

Members of the industry - the Irish Insurance Federation (IIF) - strongly rejected the allegations.

They produced a consultants' report which supported the current level of premiums on the basis that claims costs here are far higher than many other countries.

However, this report by TillinghastTowers Perrin, was dismissed as a `public relations mission' by the IIF. Committee members said young drivers are `being held to ransom' .

There were calls for the matter to be referred by Government to the Competitions Authority to investigate if a cartel is in operation.

Fianna Fail's John McGuinness said insurers are `running amok' and had abused the fallout from the September 11 attacks in the US to justify high premiums.

The sector was also described as a `multi-million pound industry shrouded in secrecy'.

IIF Chief Executive Mike Kemp rejected allegations that young drivers were being `ripped off' or that there was a cartel.