Vol. 412 No. 7
1 Mr. Howlin asked the Minister for Industry and Commerce if his attention has been drawn to the report of the Consumers Association of Ireland issued on 6 November 1991 describing the spiralling cost of motor insurance and the national outrage in this regard; if he will outline the steps, if any, he proposes to take to control further unwarranted increases in motor insurance costs; and if he will make a statement on the matter.
10 Mr. Durkan asked the Minister for Industry and Commerce if he will outline the extent of any progress made in the implementation of the recommendations of the inter-ministerial group on motor insurance which examined the contributory factors to the high insurance costs in this country; the extent to which he expects insurance costs to be reduced as a result of such measures; when he expects benefits, if any, to be passed on to the motoring public, with particular reference to young drivers; if he envisages a reduction of motor insurance costs in line with other European countries as a result, in 1992 or later; and if he will make a statement on the matter.
40 Mr. Gilmore asked the Minister for Industry and Commerce if he has any plans to reduce the level of motor insurance on small commercial trucks.
56 Mr. Durkan asked the Minister for Industry and Commerce if he will give details of measures, if any, which he has taken to stabilise or reduce motor insurance with particular reference to young drivers; and if he will make a statement on the matter.
59 Mr. Durkan asked the Minister for Industry and Commerce if he will give details of (1) the way Irish motor insurance premiums compare with those of other EC member states and (2) the way the number and value of claims compared with those of this country; and if he will make a statement on the matter.
I propose to take Questions Nos. 1, 10, 40, 56 and 59 together.
I would refer the Deputies to the contributions which the Minister for the Environment and I made to a debate on motor insurance in this House on 2 and 3 July 1991 — Vol. 410 No. 2, columns 377-409 and Vol. 410 No. 3, columns 672-718 of the Official Report.
In the course of these contributions details of a comprehensive list of measures to improve the environment for motor insurance, including insurance for young drivers, identified by the Inter-Ministerial Group on Motor Insurance and subsequently endorsed by Government, were given.
The measures announced but not yet implemented, including the introduction of the necessary legislation by the Ministers for Environment and Justice, are being given priority attention. The Deputies will appreciate that questions about road traffic legislation and legislation in relation to the courts are properly addressed to the Minister for the Environment and the Minister for Justice.
It is hoped that, when implemented, the measures identified by the Inter-Ministerial Group on Motor Insurance will have a positive impact on motor insurance costs generally, including the cost of insurance for young drivers and for drivers of small commercial trucks. However, Government action of itself will not reduce or stabilise motor insurance costs in 1992 or later unless the general public, including motorists, play their part by increased awareness of the need for road safety.
Indeed the report to which Deputy Howlin refers welcomes the measures identified by the Inter-Ministerial Group, presses for their implementation and refers also to the responsibility that motorists have in terms of road safety and the cost of injury compensation.
An EC wide survey carried out by a French research company in 1990, based on a selection of family cars, found that Ireland had the highest third party motor insurance rates in the EC while Irish comprehensive rates were the third highest in the EC. In both instances the survey indicated that the Irish rates were substantially in excess of the EC average.
In any market the price of motor insurance is substantially determined by the cost of claims and research by my Department suggests that the average cost of motor insurance claims in Ireland is considerably higher than most of the other EC member states.
I would point out that unless and until the claims experience, including the claims frequency and levels of compensation paid to victims of road accidents in Ireland matches that obtaining in other European countries there will be divergences between motor insurance premia in Ireland and those applying in other countries.
Is the Minister aware that the report to which I referred is not so much a national disgrace as a national outrage? Is he further aware that, despite the action he says the Government have taken, it is expected that motor insurance premia will rise by up to 25 per cent this year? Is he also aware that there are no relevant legislative measures listed for enactment this year?
I assure the Deputy that there is no way that motor insurance premia will rise by 25 per cent this year. They will rise somewhat over the year but substantially below that figure because many of the companies have already reported an improved situation in so far as the courts and awards are concerned, in some respects at least but not, unfortunately, in all. I have before me, and which has already been referred to by me, the Minister for Justice and the Minister for the Environment a substantive list of legislation——
It is not ordered for this session.
It is hoped that much of this legislation can at least begin in this session. When it is implemented it will make a significant difference; but the underlying problem here, as I pointed out in my reply, is the cost of claims.
Is the Minister aware that the Consumer Association of Ireland's magazine Choice indicated that rises would be of the order of 7 per cent to 25 per cent this year? Is he further aware that for a great number of people, particularly young people it is the difference between being able to go to work and not, especially in rural areas? This issue was highlighted more often than any other in the local elections. Will the Minister agree that it is time not to tinker with legislation — we tried that in the Courts Bill previously — but to take a bold initiative to try, as New Zealand has done, to transfer the cost of insurance to motor fuels or some other bold initiative which would allow the majority of people to afford the insurance of their motor vehicles.
I am aware of the magazine article to which the Deputy referred. However, what he is saying is very different from what he said a minute ago. He now said that the increases will range from 7 per cent to 25 per cent, which is very different from saying that the increases will be 25 per cent. Many of the increases will be 7 per cent, 8 per cent and 9 per cent. In the case of some companies there may be increases of 25 per cent where they have not imposed an increase for several years, which is the case in respect of a number of companies. I am well aware of the need to try to be as radical as possible in tackling this problem, because it is a very serious one. I established an inter-ministerial group and I helped to get them to agree to quite an extensive list of legislation. I had a genuine commitment from the Ministers and Departments concerned to implement those as quickly as possible. I am not sure that transferring the cost of motor insurance to fuel would be helpful to a country which is, as we are, heavily dependent on tourism. It would have considerable inflationary costs. We have a pretty poor public transport service here and, as the Deputy pointed out, many people need a car to go to work where in similar circumstances in other countries they would not. It would penalise unduly. There are other ways of approaching it. One I have looked at from time to time, but which I am afraid I am not likely in the short term to get the establishment to agree to, is the possibility of having awards made by bodies or fora other than the very expensive courts.
Deputy Howlin rose.
I need hardly remind the Deputy that we are dealing with priority questions to which a very strict time limit applies.
I have a final supplementary.
I will allow a brief question.
Will the Minister comment on the report which says that many solicitors are now involved in ambulance chasing, offering to prosecute on a no win basis, which is leading to extra prosecutions and forcing people to sue when they would not normally think of doing so?
I agree that is happening and I very much regret it. As the Deputy may know, there is a provision in the recently published Solicitors Bill which will enable the Minister for Justice to deal with that malpractice, which the Government deplore.
