DUBLIN (Reuters) – The Central Bank of Ireland on Wednesday called for reform of the home and auto insurance renewal market, saying current policies can significantly penalize those who stay with a particular provider while offering lower prices to new customers.
The bank, which acts as the country’s regulator for the insurance industry, criticized policies of charging customers higher premiums over expected costs the longer they stay with an insurance provider, a policy known as the “market price”.
“Our analysis shows that some of the practices identified could lead to unfair outcomes for some consumers in the auto and home insurance markets,” the bank said in a report that examined 11 providers and interviewed 5,500 consumers.
“As a result of these practices, the premiums paid by some policyholders deviate significantly from the expected costs of the policy to the insurer,” the report said.
The bank called for a ban on “price marching” in the auto and personal home insurance markets, new requirements for providers to review their pricing policies and processes every year, and new rules for consent and consumer disclosure.
Reporting by Conor Humphries; Editing by Bernadette Baum