The European Commission has opened a formal competition investigation into Insurance Ireland to see if it prevented access to its data pool which may have restricted competition in motor insurance.

Commissioner Margrethe Vestager said insurance is essential for all car drivers in Europe.

She said the Commission is investigating whether companies wishing to offer their services on the Irish motor insurance market may have been unfairly prevented from accessing a data pool managed by Insurance Ireland for its member companies.

"This could potentially reduce Irish drivers' choice of motor insurance policies at competitive prices," she said.

Insurance Ireland is an association bringing together several member companies active in the insurance sector in Ireland.

It administers and makes available to its member companies the Insurance Link database and its member companies contribute insurance claims data to the database on an ongoing basis.

The system is supposed to facilitate the detection of potentially fraudulent behaviour by insurance claimants and to ensure the accuracy of information provided by potential customers to insurance companies and/or their agents. 

In the case of Insurance Ireland, the Commission's investigation will assess whether the conditions imposed on companies wishing to participate in and access the database may have had the effect of placing these companies at a competitive disadvantage on the Irish motor insurance market in comparison to companies already having access to the database.

If proven, the practices under investigation may breach EU competition rules, which prohibit agreements between companies that prevent, restrict or distort competition within the EU's Single Market (Article 101 of the Treaty on the Functioning of the European Union (TFEU)).

The opening of the formal investigation follows inspections carried out in July 2017 in the Irish motor insurance market.

The Commission will now carry out its in-depth investigation as a matter of priority. It said the opening of a formal investigation does not prejudge its outcome.

In a statement, Insurance Ireland said it was important to note that the European Commission has not reached any conclusions or made any findings in respect of it. 

It said it understands the investigation is focused on the InsuranceLink database, which is a secure database that holds claims information as a tool to assist in fraud detection. 

InsuranceLink is accessed by Insurance Ireland members and non-members and has been in operation since 1988.

"Insurance Ireland is cooperating fully with the European Commission in its enquiries and is confident its practices are fully compliant with competition law," it added.