Vol. 355 No. 4
asked the Minister for Industry, Trade, Commerce and Tourism if he is aware of the high rate of insurance premium which industrialists in this country have to pay under employers' liability compared with their competitors in other EC countries; and the action he proposes to take in the matter.
16.
asked the Minister for Industry, Trade, Commerce and Tourism if he is aware of the very serious position of companies and the GAA with regard to employers' liability and public liability insurance, as a number of insurance companies are now refusing to insure and renew liability as they become due; and if he is aware that employers are informing the Department of Labour that, where insurance is not being renewed, factories will close and workers will be made redundant.
I propose to take Questions Nos. 15 and 16 together.
I am aware that some concern has been expressed at the cost and availability of liability insurance. Difficulties in this area reflect the large underwriting losses on liability insurance incurred by insurance companies in recent years; these losses came to £36 million in 1983.
The level of losses and of premium rates are largely determined by the amount of awards and the number of claims. The amounts of awards appear to be higher here than they are, for example in the UK.
The level of awards is ascribed by many commentators to the existence of the jury system. However, the Prices Advisory Committee on Motor Insurance, which reported in 1982, did not consider that the jury system should be abolished. An alternative measure, to the effect that the trial judge should be permitted to guide the jury on the going rate of general damages, is being considered by the Committee on Court Practice and Procedure at present.
The most important factor in reducing the number of claims is action by individual enterprises to improve safety procedures in the workplace.
In so far as the availability of insurance is concerned, I have arranged with the representative body of insurers an agreed procedure for handling any case where a company or organisation has difficulty in obtaining liability cover. Anyone experiencing difficulty should contact the insurance section of my Department.
We are the only country with a jury system. Does the Minister of State agree that the existing jury system and the high awards made are largely responsible for the high premiums industrialists have to pay for insurance cover?
I am aware of criticisms within the insurance industry of the high level of awards made, apparently because of the existence of the jury system. However, this system has operated here for many years. This matter is under consideration at present by the Committee on Court Practice and Procedure. I should point out that this is a matter primarily for the Minister for Justice and it would involve a substantial change in court procedure if one were to abolish or amend that system.
There are many food processing industries located in the area I represent and these industrialists must pay an excessively high premium because the industry is accident prone. This adds considerably to their costs. Together with that, they must pay double what their competitors pay in telephone charges, electricity——
That does not arise on this question.
Many submissions have been made to the Department and I ask that this matter be taken up with the Minister for Justice because the high premiums are placing an excessive burden on industrialists. Are you aware——
A question please, Deputy.
——that the backlog of claims goes back over three or four years? Industrialists are not able to compete.
I am concerned at the high level of awards. Perhaps it is not fully appreciated that the most important factor in reducing the number of claims is for companies to improve safety procedures in the workplace. I draw the Deputy's attention to the report of the commission of inquiry on safety, health and welfare at work which reported in June 1983.
Is the Minister aware that companies which have been in operation for years are receiving notices about a month before their renewal date to the effect that insurance cover is being withdrawn? Recently I asked nine companies to cover an engineering company which has been in business for over 20 years. It has a good claims record but its insurance cover was withdrawn. When pressed by me an insurance company quoted £40,000 for EL and PL. This company employs 31 people.
We cannot deal with individual cases.
Is the Minister of State aware that they asked the company to carry the first £10,000 of each claim plus legal costs? Further, is he aware that under the enterprise scheme, involving the Youth Employment Agency, the IDA, AnCO and others that persons who are about to start an industry are unable to get insurance cover now and cannot go ahead?
The Deputy is making a long speech.
In view of the grave importance of the issue in connection with employment, what is the Minister of State going to do to rectify the position? It is causing great hardship and is having a crippling effect on our economy.
Without being short with the Deputy, since I do not know the company he has mentioned I could hardly know of their insurance experience.
Is the Minister of State aware that this is going on?
If the Deputy has a specific case I should be glad to have it examined if he submits details to me. With regard to the availability of insurance, as I stated in my reply I have made arrangements with the representative body of insurers on an agreed procedure for handling any cases where a company or organisation have difficulty in obtaining liability cover.
Is the Minister of State aware that one of the traditional Irish sports, road bowling, which is centralised in Cork and in the northern part of the country is under threat at present because of the refusal of insurance companies to extend public liability cover? Will he agree that at present we are only playing around with the problem because of the failure of successive Governments to look at the system in the courts——
The Deputy is making a speech.
No, I am asking a question.
It is a very long question.
The present system is such that it requires the service of four legal representatives, two senior counsel, a junior counsel and a solicitor. Will the Minister recommend that the Law Reform Commission look at this system as well as the jury system?
I gather that the Deputy has a question down for written reply tomorrow that covers the area he has specified. Perhaps he will leave it until then.
It deserves an answer. It is the fundamental reason we have such high costs.
I have stated that the matter is under consideration.
In view of the fact that the insurance companies lost £36 million last year——
In 1983.
The figure for 1984 is not yet to hand but the amount would be around the same or even more. Is it true they do not want to insure now and that when they are pressed by the association they quote exorbitant premiums which they know companies will not be able to accept? All of this is causing redundancies.
I have answered the question. This is all repetition but if the Deputy wishes I will repeat what I said.
Most of the questions are speeches.
Will the Minister of State arrange a meeting with the insurance companies to highlight the issues that have been raised?
I am sure the insurance companies are well aware of the situation.
It is the Minister's responsibility to arrange a meeting with the insurance companies in view of the grave unemployment position. All of this comes under the Minister's Department and it is his responsibility.
That is not a question. I am calling Deputy Lyons.
Will the Minister arrange a meeting?
The insurance industry is well aware of my concern in this matter.
Is it the case that the Minister is not going to arrange a meeting with them? He is doing nothing and I will tell the employees concerned.
In view of the facts that are now emerging and from the questions put today, will the Minister assure the House that he is giving serious consideration to the matter as it stands now and which is likely to get worse?
Will the Minister arrange the meeting? Let him be a man. Let him get the people around the table.
The Deputy can be assured that the industry is well aware of my concern in this matter.
Will the Minister get the people around the table? Do they know he is there at all?
They know I am here.
The Minister of State said he did not propose to dispense with the jury system——
I did not say such a thing. I said the matter was under consideration.
The Minister said in one report that they did not propose to dispense with the system.
They did not recommend it.
Is the Minister of State aware that we are the only country in the EC who are still holding to that system? Our industrialists are taxed because of the system we use and I think the matter should be considered urgently by the Minister with the Minister for Justice.
We cannot have a debate on this question.
It is a very important issue.
I do not disagree with that but if it is so important the Deputy should take steps to get the matter discussed on the floor of the House in an orderly way. I am calling Question No. 17.
We have been orderly up to now.
May I ask the Minister of State——
I have called Question No. 17.
17.
asked the Minister for Industry, Trade, Commerce and Tourism if he will give details in relation to the Motor Insurance Advisory Board established under SI 299 of 1984; and when he expects their first interim report.
The Motor Insurance Advisory Board were established on 16 November 1984. The terms of reference——
I am being orderly but I wish to ask a question.
I called Question No. 17.
The Chair is being very unfair.
On a point of order, will the Minister of State start his reply again?
Being a backbencher in this House has its disadvantages.
The Deputy should not blame the Chair for that.
I am not blaming the Chair but he should give us a fair crack of the whip.
Will the Minister please deal with Question No. 17?
The Motor Insurance Advisory Board were established on 16 November 1984. Their terms of reference are to advise me on matters relating to motor insurance generally, including premium rates, loadings and the availability of insurance cover. The board have power to obtain information and statistics from insurers to enable them to carry out their inquiries.
The board will report to me on an annual basis and, accordingly, I would expect their first report at the end of 1985.
Details of the members of the board are set out in a statement to be circulated in the Official Report.
Members of Motor Insurance Advisory Board
Mr. Nial MacLiam (Chairman): former Chairman of Restrictive Practices Commission, former Assistant Secretary in the Department of Industry and Commerce, Chairman of Prices Advisory Committee on Motor Insurance (1982). Mr. David Jennings: Senior Statistician, Central Statistics Office. Mr. William Lewis: Director, Coyle Hamilton (Brokers). Mr. Michael Maguire: Secretary General of the Federation of Insurers in Ireland. Mr. John C. Parker: Manager, Automobile Association, Republic of Ireland.
