asked the Minister for Industry and Commerce the measures, if any, he proposes to take to reduce and control the cost of motor insurance in particular, insurance for younger drivers.

With the permission of the Chair and Deputy Barry, I shall reply to this question. I am aware of the burden which high insurance costs impose on all sections of the motoring public and I intend to do everything practicable to alleviate this burden where possible. I am particularly anxious to improve the position of young drivers. However, the cost of insurance is directly related to the level of claims occurring.

The motor insurance industry in Ireland has had significant underwriting losses in recent years. In the absence of a change in the underlying claims experience, lower insurance rates for young drivers would mean higher rates for other categories of driver. More mature drivers have been statistically proven to be somewhat safer than their younger counterparts whose rates reflect the higher risk.

As the insurance supervisory authority, my primary responsibility is to ensure that companies are maintaining their solvency margins and reserve requirements. I must, therefore, respect the right of insurers to charge economic premiums in the light of their underwriting experience. The initial loadings imposed on first time insureds and more specifically young drivers can be offset over time by earning a no-claim bonus. However, many young drivers have several years of claims free driving as drivers on their parents' policy, when they first take out insurance in their own name. Many of them get no credit for this. I have had discussions with motor insurers and they have undertaken, when the Courts Bill is enacted, to give a 10 per cent to 20 per cent no claim bonus to young drivers taking out their first policies if they have been named drivers on their parents' policies for two years, have a full licence and have been accident free. I will be pressing for further improvements. Benefits should also come from tackling legal costs, uninsured driving and road safety, which are being considered in the context of the current joint Government/insurance industry discussions on how to reduce the cost of insurance.

A major motor insurance company has recently introduced a special young drivers scheme on its own initiative, which sets down a maximum premium in absolute terms while at the same time allowing a young driver to commence earning an entitlement to a no claims bonus in the ordinary way. I would urge other motor insurance companies to follow this lead.

The fact remains, however, that it is only when the overall burden of claims costs is reduced that insurance companies will be able to reduce premiums. For this to be achieved, it will be necessary for the motoring public generally, and young motorists in particular, to improve standards of driving and road safety — standards which are all too often lacking at present.