AXA yesterday distanced itself from claims that it had introduced a fixed, 25 per cent premium loading for each penalty point speeding offence. At present, the company said it operated a policy whereby anyone convicted of driving 20 m.p.h. above the speed limit received a premium increase at renewal of up to a quarter, or €250, for the average premium.
Law-abiding drivers will benefit from lower insurance premiums once the penalty points system is fully in place, motor insurance companies have said.
"There will be a direct result in lower premiums," a spokesman for AXA, the State's largest motor insurance provider, said.
"It won't be an instant effect but ultimately there will be lower premiums for good drivers because good drivers will be sought after."
Hibernian's head of customer relations and marketing, Mr Ciaran Mahon, said "our starting position is that people should benefit from the change."
Asked whether the company would prioritise increased premiums for repeat offenders or reduced ones for non-offenders, he said: "We would suggest that good drivers get rewarded first."
The comments came amid growing concern that the penalty points system might be exploited by the insurance industry to boost its earnings.
"In terms of accumulation of points we have not worked out premiums yet and we will be looking at how the system applies in other countries for that. In the meantime, the current position where you will be penalised for excessive speeding will continue to apply," the company spokesman said.
AXA already applies other loading charges for different offences. The largest is for drink-driving, where offenders face a hike in their premiums of more than 100 per cent.
While AXA had yet to decide how offenders under the new system would be penalised, the spokesman said "the more points you have, the higher your premium will be. Law-abiding drivers have nothing to worry about, and indeed will benefit from lower premiums."
Mr Mahon said Hibernian applied loadings under existing arrangements, including one of up to 25 per cent for motorists caught speeding 10 m.p.h. above the limit.
He stressed, however: "We don't think it is necessarily fair to penalise someone on their first strike, and there won't be blanket increases under the penalty points system." Rather, he said, each case would be viewed on its merits, first, on the basis of whether the driver posed too great a risk to insure and, second, on how serious the driver's offences were.
In this regard, he said it was important that insurers had access to the information from the National Driver File (NDF), the computerised database to come on stream next year with records of all driving endorsements. "It's not a question of trapping individuals who have made a mistake. It's a question of looking for consistent offenders," Mr Mahon said.
The Minister for Transport, Mr Brennan, said he was in favour of disclosing NDF information in some form to insurers to allow good drivers benefit. However, any such disclosure may be open to legal challenge.
Fine Gael's spokesman on enterprise, trade and employment, Mr Phil Hogan, yesterday accused the Government of "another U-turn" by signalling it would release information to insurers.
"When former Minister of State Bobby Molloy brought this Bill to the Dáil he stated that penalty points information would not be provided to insurance companies," Mr Hogan said. "It is not acceptable that any information relating to minor misdemeanours should be grabbed as another opportunity by insurance companies to hike up costs and premia."
A spokesman for the Minister said Mr Brennan did not wish to engage in a political row over the matter. However, he said the Minister had emphasised that "he would only agree to releasing information in the context of bringing down insurance premiums for law-abiding drivers."
AA public affairs manager Mr Conor Faughnan expressed concern at the prospect of "blunt premium increases" for every offence. "It would be a bad day for motorists and would not reflect well on the motor industry as a whole if insurers used this as an excuse to go profiteering," he said.
