Fianna Fáil Finance spokesperson Michael McGrath has welcomed an announcement form Minister for Finance Michael Noonan that a review of the insurance industry in Ireland is to be carried out.

He was speaking following a Dáil exchange this morning when Minister Noonan confirmed to Deputy McGrath that the review to be conducted of the insurance sector will involve the Department of Finance, the Central Bank and other Departments and agencies.

CSO figures published today indicate that motor insurance rose by 4.4% in December alone. It is now the fastest rising item in the CSO basket of goods and services having risen by over 31% in 2015. Insurers are warning of further increases of up to 25% in 2016.

Deputy McGrath commented, “This is a long overdue announcement. I have been calling for some time for the re-establishment of the successful Motor Insurance Advisory Board whose recommendations achieved a fall in insurance costs of 40 per cent in real terms between 2002 and 2013. Today’s announcement is a step in the right direction, however if given the opportunity Fianna Fáil would re-establish in full the Motor Insurance Advisory Board.

“Motorists are absolutely reeling from increases in insurance premiums. By the end of 2016 the cost of insuring an average size family car is likely to have gone up in the region of €300 in just two years. This is a massive hit to disposable income.

“Up to 2013 we were in a period of falling motor insurance premiums. However the benefits that were achieved from concerted action to reduce costs are now evaporating. This is resulting in a huge squeeze on family finances and putting businesses under increased cost pressure.

“It is important that a review of the sector look closely at motor insurance costs in particular. However there are also problems in relation to home insurance, not least of which is the failure of firms to provide flood insurance cover even where flood relief works have been carried out.

“The comments from Standard and Poor’s today regarding the regulation of the Irish insurance sector are very timely and highlight a number of serious flaws in how the sector is governed. These have contributed to wild swings in premiums in recent times. The regulation of insurance firms should form a key part of the review of the sector,” concluded Deputy McGrath.