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'Loyalty Penalties' Applied By Insurance Companies Banned From July

Stock image: Pexels

The Central bank announced the move on Tuesday.

So-called 'loyalty penalties' applied by insurance companies on renewal car and home premiums will be banned from July.

The Central Bank announced the move on Tuesday afternoon, saying it wants to bring 'fairness' to consumers.

From July 1st, insurance companies will no longer be allowed to charge higher premiums to loyal customers providing the risk to the insurer stays the same.

This practice, known as price walking, saw renewing policy holders charged more than the previous year.

It had conducted consultations over 2 years, where it analysed 90 percent of insurers, more than 11 million policy data points and spoke to over 5 thousand customers.

New customers discounts will be allowed to stay in place.

The move will encourage customers to continue shopping around.

The new regulations will come under the Consumer Code, which means companies can be sanctioned if found to be in breach.

Director of Policy and Risk, Central Bank, Gerry Cross discussed the new regulations with Ciara Noble on Tuesday's Kildare Focus:

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