asked the Minister for Industry and Commerce if he has had any assessments carried out of the impact on insurance costs of the abolition of juries in personal injuries cases.
Ceisteanna—Questions. Oral Answers. - Insurance Costs.
9.
The abolition of juries in personal injury High Court cases is not a panacea for, but is an important step in controlling, insurance claims costs. The Deputy will appreciate the difficulties in predicting savings arising from a measure which has yet to be enacted and which will facilitate a moderation or a reduction of costs in other legal areas associated with personal injury claims. However, the Irish Insurance Federation have given a commitment to me that and I quote:
when the Courts Bill, 1986 is enacted by the Dáil, IIF members will agree to introduce a special no-claim bonus for drivers who have been named on one of their existing motor insurance policies, subject to the following conditions.
The driver must:
—hold a full driving licence for at least one year;
—have been named on the policy for at least two years;
—not have had any claims or driving convictions.
Subject to meeting the foregoing conditions, companies would grant the person involved a special discount equivalent to at least point 1 on their normal bonus scale which in practice would represent a discount of between 10 per cent-20 per cent of the premium which would otherwise be payable. This is a very real and immediate benefit which will be available to young drivers later this year.
In addition to this specific commitment in relation to young drivers, insurers have stated publicly that whatever general savings accrue as a result of the abolition of juries will be passed on to policy-holders. Even if award levels only cease to spiral and premiums stabilise at current levels, a significant real saving for policyholders will have been achieved. Insurance industry sources have estimated that an overall reduction of at least 10 per cent in insurance premium levels could be the eventual outcome. These savings will be passed on to policy-holders.
Furthermore, it is apparent that already premium levels, particularly in motor insurance have been reducing in recent months as a result of increased competition and in anticipation of the abolition of juries and other Government measures to reduce insurance costs.
What worries me about the Minister's reply is that it is all very general and vague with respect to what the insurance companies might have been saying for the last two or three years. The view privately expressed now seems to be different. Has the Minister or his Department looked at this area and have the Department made any suggestions in relation to areas where they would like to see things happen if the Bill is passed and juries are abolished? Are there ideas in the Department as to the direction in which insurance companies should go because of this measure being enacted?
The Department of Industry and Commerce are never short of ideas as to what they would like to see happen in the insurance industry. We are naturally concerned about the level of employers' liability and public liability and we are seriously concerned about the number of young drivers without insurance cover. All of that contributed to higher claims at the end of the day. We in the Department of Industry and Commerce have let it be known to the insurance companies in no uncertain terms that we are being vigilant with regard to the amounts of money being provided for claims and in relation to solvency. We are pushing ahead and doing what the Government have committed themselves to in relation to insurance costs. We want the insurance industry to respond. It is not very general to say that young drivers' premiums will be coming down between 10 per cent and 20 per cent, or that overall premium levels will come down by at least 10 per cent. That is being specific.
Will the savings arising from the abolition of juries be separately identified in the accounts of the companies or in any other way in which a figure could be put on them? If not, how will the Minister be able to ensure that the savings are passed on to the insured public?
The Deputy will agree that the abolition of juries is only one aspect. Because court costs were so high many cases were brought to the steps before being settled. Anybody could calculate exactly what the High Court costs would be in any specific case. This gave rise to a lot of frivolous claims. When I talk about the total cost I do not talk only about legal costs, but about engineers' costs, medical costs and doctors and other professional fees. That whole area is being addressed and the industry will respond to the savings that will accrue from our approach. Each case has a different set of costs depending on how long the case goes on, so the Deputy cannot ask for specific cost savings in relation to a specific case.
Would anybody other than the insurance companies themselves identify independently, in figures, the likely savings and, if not, how can the Minister be sure that these savings will be passed on?
There might not be any.
There will be savings, and they will be passed on.
Is the Minister aware that in the last Dáil the subcommittee on motor insurance costs which was chaired by me did not recommend the abolition of juries until an undertaking was given by the insurance companies to effect a reduction in the cost of motor insurance? Will the Minister seek an assurance from the industry before implementing this legislation that they will in the foreseeable future reduce the cost of motor insurance?
Already, in anticipation of the passing of this legislation, some insurance companies have reduced premiums. There is also more competition in these days and the indications are that the insurance business is getting into a more healthy state than it was a few years ago. All that indicates a stabilising of the insurance industry and that would be welcomed by everyone.
Question No. 10.
I am sorry I missed the Minister's main reply to the last question but do his Department or the Department of Justice have any figures or facts which would show whether in Great Britain when the same change was made very shortly after the war there was an immediate drop in insurance premiums?
I do not have that information available. I will inquire in my Department and in the Department of Justice and I will let the Deputy have it. I read somewhere that there was a big improvement in the situation in Britain when they adopted measures similar to the ones we are adopting here.
I was inquiring in particular about the level of insurance premiums. One would imagine that a Government presenting this legislation would have a book full of facts and figures about the impact elsewhere and would generally be able to provide comparative tables enabling the House to judge whether what was being proposed was making any sense. Is the Minister aware that his colleague, the Minister for Justice, when the Bill was before the House three weeks ago, admitted he had no comparative tables showing the likely impact on the size of awards in cases being decided by a judge alone instead of by a jury?
I think the Deputy would agree with me that it would not be possible for any Minister to answer a question that is in no way related to the question asked or to have those comparative figures available to him. If the Deputy wishes to take up the matter in a separate question I will be glad to give him that information.