asked the Minister for Industry, Trade, Commerce and Tourism if he is aware of the difficulties caused to insured drivers with the PMPA following recent increases in premiums of up to 50 per cent; and if he will explain in detail the reasons such substantial increases were granted by him.

The PMPA administrator proposed a number of changes in the rating structure of the company with effect from 1 September last, equivalent to an annual increase in revenue of 15.3 per cent. Having referred the matter to the National Prices Commission, I decided to raise no objection to the proposal which was justified on underwriting grounds and necessary as a step in restoring the company's business to a sound commercial and financial footing. The administrator is under a statutory duty to achieve this objective.

Following implementation of the revised rates, a small number of inquiries relating to renewal premium levels was received by my Department. However, I am not aware of any particular difficulties being faced by PMPA policyholders, as suggested by the Deputy.

I should point out that only a small percentage of policyholders will incur premium increases of 50 per cent; among these are taxi drivers to whom the increase approved in July 1983 did not apply.

Is the Minister of State aware that in addition to the increase of 48 per cent granted by the Department to the PMPA for drivers under 25 years, loading has been increased from 50 per cent to 100 per cent? Further, is he aware that a motorist with some years accident-free driving experience is paying in the region of £1,265 for insurance on a Fiat 1300? Does the Minister consider that just and fair?

I am aware that the decision approved by the National Prices Commission confined the allowance of the no-claims discount on private car policies to those loadings particular to the policyholder, that is, loading in respect of drivers other than the policyholder would not be reduced by the amount of the no-claims discount allowance to the policyholder. That was a change which I allowed on underwriting grounds. I am satisfied that the level of premiums for additional driver loadings charged by the PMPA is competitive when compared with other premiums charged by other companies.

The Minister's reply is rather strange because I have had correspondence from him which confirmed that the driver to whom I have referred has had insurance increased from over £500 to nearly £1,300. It is not surprising in the present circumstances that young motorists have no alternative but to go to the PMPA and they are being exploited by the PMPA? Would the Minister like to comment on that?

I would categorically reject the last part of the Deputy's question. For four out of five policyholders with the PMPA the increase will amount to less than 10 per cent.

That is not true.

The PMPA have agreed to examine individually on a referral basis any case where the increase is over 40 per cent or £200, whichever is the lesser, and except where the increase is fully warranted by reference to the underwriting factors such as adverse claims experience, loadings due to licence endorsements, drunken driving convictions and so on, to postpone any increase in excess of those thresholds until the next renewal date. I think that is a fair effort on the part of the company.

Will the Minister not agree that his Department gave permission for a 48 per cent increase across the board for all insured with PMPA and the additional increase which I have mentioned has also been allowed for those under 25 years? In view of the additional income these excessive increases must mean to the PMPA, are we reaching a situation where the levy imposed on all others insured will be terminated at the end of this year?

That is a separate question. It has nothing to do with the question on the Order Paper.

As I said in my reply, for four out of five policyholders the increase will amount to less than 10 per cent. The pricing structure applied for by the PMPA in relation to private cars was directed primarily towards additional drivers to policyholders. There was no increase in the basic rate for the policyholder himself. From my statistics, so far as insurance for private cars is concerned the PMPA are competitive. No matter what increase I give to insurance companies, it is a competitive market and companies will attract customers only if they remain competitive.

That is stretching the word "competitive".

It is a fact that if they got an increase of 48 per cent in respect of commercial vehicles, taxis and other categories of vehicles in July 1983, the then Companies Act did not apply probably because of market conditions.

I must ask a further question. I have a letter from the Minister in which he states——

That is not a question, and the Deputy may not quote at Question Time.

Is the information in this reply from the Minister correct? The PMPA were given approval last July to increase their third party premiums by 48 per cent. Is that correct?

That was correct in July 1983.

Why did the Minister not say that in the first instance?

I said it in a supplementary reply.

There was an increase of 48 per cent and a further increase in the load for those under 25 years of age from 50 per cent to 100 per cent.

I would be quite happy to clarify any matter for the Deputy. The price increase I granted to the PMPA is slightly complex in so far as it does not apply to primary policyholders, but it does have effect in relation to the discount record for additional drivers. That is where the increase comes. I am satisfied that the PMPA rate structures for private motorists remain competitive.

The Minister is being misled by the PMPA.

The Minister is not being misled by the PMPA. The Deputy need not worry about that.

Then the House is being misled.

My predecessor acted very wisely in relation to the PMPA.

The Minister should answer the question he is being asked.

It is on my mind.

On the Minister's what?

I am happy that my predecessor, Deputy Cluskey, acted very responsibly in respect of the PMPA. Some people over there do not think so.

Ceist 9.

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