Vol. 263 No. 10
asked the Minister for Industry and Commerce what steps he proposes to take to guarantee the continued availability of insurance cover to all hauliers and private and hackney car owners at present insured with a company (name supplied) which is discontinuing its motor insurance business as from 1st December.
94.
asked the Minister for Industry and Commerce what steps he intends to take to help people who will not be able to acquire motor insurance cover if an insurance company (details supplied) ceases to renew policies after 31st December, 1972.
95.
asked the Minister for Industry and Commerce if he considers it equitable under present insurance and company law to allow an insurance company to withdraw from the motor market, keep its licence and continue to trade in general accident and fire business; and if such procedure is permitted.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 93, 94 and 95 together.
I consider that the insurance companies have within their capacity the ability to absorb business resulting from the withdrawal of the company concerned from motor insurance business. One company have, in fact, already expressed a willingness to take on policy holders affected by the decision.
This does not necessarily mean that every single policy holder will be taken on by the interested company and I would have no power to compel them to do so. As the Deputy is no doubt aware, the Minister for Local Government has special machinery available for helping to secure cover for persons who have been refused cover or who have been quoted a premium that is tantamount to a refusal and any cases of difficulty should be referred to him. The Deputy may have seen the advertisement, inserted by the Irish Insurance Association in the daily Press on 6th November, 1972, drawing attention to these arrangements.
While I consider it regrettable that a company should decide to withdraw from the motor market when the report of the Insurance Industry Committee is expected shortly there is no legal barrier to their doing this. In due course, when all the company's liabilities to their motor policy holders have been discharged, my Department will request them to return the licence for deletion of motor insurance from their scope.
The Minister has not replied to Question No. 95. Does he consider it fair and equitable that they should do this, withdraw from motor insurance and keep the more remunerative side of the business, fire, general and life insurance, on their books? Does he not feel it is his duty to legislate to see that this does not happen, as people are in serious difficulty trying to get motor insurance at fair rates?
I want to say categorically——
The Minister does not like it?
I do not like it. At the time of the establishment of the insurance committee, I asked all insurance companies to maintain the status quo until that report had been submitted to me. I am also conscious of the fact—let me say, in fairness to the insurance companies—that the report is taking far longer than it was expected to take. I do not mind who else criticises, but I do not want this to be taken as a criticism by me of the committee. It is a pretty sizeable committee, and while I have heard derogatory things said about the committee. I do not believe there was ever a voluntary group of people of such numbers who have met so often. I have been given to understand that the sessions are quite hot—not that I have any bugging arrangements but they do meet in my Department and the walls are not as thick as they might be. However, they meet regularly and constructively and I am hoping for a report shortly. I have stood in this House and given information supplied to me by this committee on a number of occasions. I hope to have the report at the end of next month. I have been saying that since last December. I am a little disappointed that I have not got it. I have been told it is on its way. I have asked for it.
If the Minister listens at the thin walls he might get an idea of when the report is likely to come.
The report will come. I am being honest about the situation. I know that they are trying to hammer out a recommendation. It is not easy.
96.
asked the Minister for Industry and Commerce if the operation and probable or possible operation of the provisions of section 3 of the Insurance Act, 1964, has inhibited and is inhibiting insurers from issuing motor insurance policies; and if he proposes to take any steps to change the present difficult position encountered by citizens who seek motor insurance for the first time.
97.
asked the Minister for Industry and Commerce if he will (a) consider the repeal of section 3 of the Insurance Act, 1964, and (b) improve the opportunities for foreign insurance companies to quote in competition for motor insurance business here by easing the restrictions on insurance trading and premium quotation imposed by the 1936 Act.
With your permission, a Cheann Comhairle, I propose to take Question Nos. 96 and 97 together.
I do not consider that the operation of section 3 of the Insurance Act, 1964, is inhibiting insurers from issuing motor insurance policies. The section provides for the payment, from a fund financed by insurance companies, of certain liabilities of insolvent insurers. All licensed non-life insurers must contribute to the fund a percentage of their non-life premium income and there is no reason, therefore, why the section should inhibit companies from issuing motor policies any more than policies relating to other classes of non-life insurance. I would not be prepared in any event to consider any amendment of existing legislation before receiving the report of the Insurance Industry Committee.
In regard to difficulties experienced in obtaining motor insurance, the Deputy is, no doubt, aware of the special machinery operated by the Minister for Local Government for helping to secure cover for people who have been refused cover entirely or who have been quoted a rate that is tantamount to a refusal. These arrangements were in fact the subject of an advertisement in the daily newspapers on 6th November.
I presume that the other restrictions mentioned by the Deputy are those relating to the licensing requirements and the control of motor premium rates under the Insurance Act, 1936. Again in this case I could not consider amending legislation until I receive the committee's report.
Does the Minister agree that it is in motor insurance that the greatest risk occurs for insurance companies? There is also the risk of insolvency by insurance companies. If section 3 of the Insurance Act, 1964, insists, as it does, that those who have the greatest premium income pay the greatest compensation if there is a failure of a company doing motor insurance business, that is an inhibiting factor, if there is any danger at all, against anybody seeking to increase the amount of his motor insurance business and, therefore, leaving himself more liable for larger liability in the event of failure by a company.
This may be so.
It is so.
There is no point in my endeavouring to make patchwork amendments at this stage when I will have recommendations coming to me shortly.
Young people cannot get insurance.
That is wrong.
I do not accept that. I must disagree with the Minister.
I have said in reply to a previous question that there is no reason why anybody cannot get insured.
At a reasonable rate?
Everybody must be insured and can get insured. It is arranged through the Minister for Local Government. The rates create a problem, but one must get insured.
At a premium that is unrealistic.
98.
asked the Minister for Industry and Commerce if he is fully satisfied that returns made by insurance companies regarding their motor insurance accounts are accurate; and what steps he has taken to check the figures submitted in relation to claims which have yet to be paid.
Insurance companies are statutorily obliged to submit certain accounts and returns to my Department each year. The accuracy of these accounts is ensured by the requirement that they be certified by independent auditors.
Among the returns required of companies transacting motor insurance business is a schedule of the number and estimated cost of claims admitted but not paid, classified according to the year of account in which the claims were originally notified. A comparison of the information in the schedule for different years enables my Department to compare estimates of outstanding claims with the payments eventually made, and in this way to check the adequacy of the provision originally made for outstanding claims.
Bearing in mind the absolute complexity of the work to be done by the auditors concerned, is the Minister aware that the people in Britain who make these examinations of claims pending are actuaries and insurance men who understand these matters? Can the same be said of the people whom the Minister charges with the job of investigating these companies to see that they are solvent? Are these people skilled in such matters? Are they insurance actuaries and people skilled in insurance work?
I have said in the reply that we have a situation whereby all of those accounts must be vouched for by the public auditors who are expected to be reputable. The experts within my Department are people who are examining these accounts through eyes of experience. The situation is that the comparison of information over different years vouches for the reliability on the one hand, or shows up the non-reliability on the other hand, of figures over a period. The people in my Department have gained experience in examining these accounts over the years. This experience must prove invaluable and must stand them in good stead in their examination of such reports.
They are not, as in Britain, insurance actuaries themselves?
I would have to communicate with the Deputy on that point.
99.
asked the Minister for Industry and Commerce if he will amend or repeal the Insurance Act, 1936, in view of the fact that a large number of owners and drivers cannot get insurance cover at present.
The special machinery operated by the Minister for Local Government for helping to secure cover for persons who are refused cover or quoted prohibitive rates of premium, ensures that no person desiring insurance cover is deprived of it, except in cases affecting the public interest.
The terms of reference of the committee which I set up to inquire into the insurance industry in Ireland, include consideration of the legislation mentioned and I would not be prepared to consider any changes in that legislation until the committee have reported. I expect to have the report on motor insurance very shortly.
