Vol. 414 No. 9
12 Mr. Durkan asked the Minister for Industry and Commerce the reason public liability and motor insurance continues to rise in this country; if he has any plans to alleviate the burden placed on consumers generally by virtue of the outrageously high cost of motor and public liability insurance; whether our costs compare favourably with those in (1) other EC countries (2) EFTA countries and (3) the United States; and if he will make a statement on the matter.
38 Mr. Sherlock asked the Minister for Industry and Commerce if, in view of the exceptionally high cost of motor insurance premia for young drivers, his attention has been drawn to the recent suggestion that a limited form of insurance should be introduced for such drivers, which would cover them only for certain limited hours during the day; if he will consider this proposal; and if he will make a statement on the matter.
72 Mr. Enright asked the Minister for Industry and Commerce the progress which has been made to date on the report of the Ministerial Group on Motor Insurance which reported last July; and if he has any plans to facilitate the resolution of the personal injuries cases through the introduction of structured settlements.
73 Mr. Durkan asked the Minister for Industry and Commerce if he has satisfied himself that public liability insurance cover is available on a reasonable basis to Irish business and industrial interests; and if he will make a statement on the matter.
76 Mr. Durkan asked the Minister for Industry and Commerce the reason motor insurance costs continue to rise in this country; and if he will make a statement on the matter.
77 Mr. Durkan asked the Minister for Industry and Commerce the current average cost per employee of public liability insurance to industry; if he will outline the way in which public liability insurance costs in this country compare with such costs in each of the other EC countries; and if he will make a statement on the matter.
I propose to take Questions Nos. 12, 38, 72, 73, 76 and 77 together.
The Deputies should be well aware as to the reasons for the level of insurance costs, including motor and liability insurance, in this country as this subject has been discussed on numerous occasions in this House. The House has already been informed of how insurance costs in Ireland compare with those in other EC countries. Data on EFTA and the United States is not readily available, nor indeed is data on the average cost per employee of public liability insurance. I would particularly 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. 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.
While the group's work was primarily concerned with motor insurance costs, those of its recommendations which are designed to impact on the cost of personal injury compensation, particularly the legal costs associated with such compensation, will, it is hoped, have a positive impact on the cost of settling all personal injury claims including those claims covered by employers' and public liability insurance.
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 in relation to the courts are properly addressed to the Minister for the Environment and the Minister for Justice. The Department of Finance are considering the taxation aspects of personal injury compensation by means of structured settlements as opposed to lump sum payments.
Unless and until the claims experience, including the claims frequency and levels of compensation paid to victims of accidents in Ireland, matches that obtaining in other countries there will be divergences between motor and liability insurance premia in Ireland and those applying in other countries.
I would like to inform Deputy Sherlock that the question of restricting young drivers to driving between certain hours has already been considered by the Inter Ministerial Group on Motor Insurance.
The group concluded that the introduction of such a system would be neither feasible nor practical. In any case third party insurance is the only form of insurance required under the Road Traffic Acts and any question of change or reform thereof is a matter primarily for the Minister for the Environment.
Where difficulties are experienced in obtaining liability insurance, whether public or employers liability, an arrangement exists with the Irish Insurance Federation. Before any case can be referred to the federation it is necessary that at least half the market — approximately 12 companies, including Lloyds — be approached by the insurance proposer without success. Evidence of these approaches — for example, a letter from a broker — together with a brief synopsis of the risk should be forwarded directly to the Irish Insurance Federation, Russell House, Russell Court, Stephen's Green, Dublin 2. It must be emphasised that, while this arrangement is reasonably successful, no guarantee can be given that cover will be forthcoming in each individual case.
However, as the insurance supervisory authority I have a responsibility to ensure that insurance companies meet their statutory solvency and reserve requirements. Therefore, I must respect the right of insurance companies to make their own underwriting decisions, including the setting of insurance premia, in the light of their circumstances and assessment of the market. No legal obligation can be placed on any insurer to quote in respect of any risk or to quote at any particular premium or to quote in any particular manner.
I do not wish to be discourteous to the Minister in the holy season of Christmas but would he not accept that, despite all his announced good intentions and those of his colleagues in this matter and the public fear that has been expressed over a number of years, remarkably little has happened to alleviate the burden on those seeking motor insurance and on people in certain categories seeking public liability insurance? Will the Minister not accept that in some counties there are people in certain occupations who cannot meet public liability costs at all and who are either going out of business or are working without insurance, which is intolerable? Will the Minister indicate perhaps some measures which would shock the insurance companies and those who may be abusing the system, and thus contributing to the problems, to such an extent that some reason will prevail in 1992?
I do not agree that nothing has happened. A great deal has been done and the insurance companies are among the first to recognise that. I have frequent consultation and discussion with them about this matter. The rate of increase in premium has dropped off very considerably compared to what it was a year ago. Earlier this year I asked companies, given all that the Government had done and had in train, to seek to avoid increases. Companies acknowledged that steps already taken are beginning to work. The frequency of accidents has dropped significantly. The Minister for Justice gave figures in the House recently. Also, the claims problems are improving slightly — of course, they are improving from an intolerable level by comparison with other countries.
Some legislation has already been passed but I hope further legislation will be before the House early in the next session which will be very helpful in this task. There is to be a major Bill on courts and court officers from the Minister for Justice and there is to be a major Road Traffic Bill from the Minister for the Environment. The nature of this legislation has already been announced by the respective Ministers.
I hope that the improved trend we have seen in the last six months will carry through into 1992 and be maintained throughout that year. Indeed, from my reading of the newspapers it would appear, for example, that the intensive enforcement of the Road Traffic Act, particularly the drunken driving regulations by the Garda this month, has been very successful in as much as the Garda are out in large numbers but are in fact catching very few offenders as the public at last are beginning to realise their obligations and responsibilities.
I hope in the course of 1992 that the widespread practice of making fraudulent claims for personal injuries in the courts will diminish. It is now accepted I think that what I have been saying in this regard for the past three years is correct. I hope the exposure of some of these fraudulent claims of late will lead to a considerable diminution. One individual, under one name or another, has made as many as 11 different claims for personal injuries within a three year period. People seem to make their living out of making these claims which is a great pity.
Does the Minister recall, before the abolition of juries, the indications from the insurance industry that if juries were abolished insurance premiums would come down? Does he not find it regrettable that they have not complied in this regard? Second, has he or the Department looked at the claims departments of insurance companies to see if they are dealing with claims in an efficient manner? I put it to him that if he does so he may find that many of them are seriously and grossly inefficient and needlessly waste expenditure in prolonging the settlement of claims within a reasonable period thereby escalating their costs and giving themselves the excuse to keep their premiums at a level well above comparable levels abroad?
With regard to the question on the Courts Act and the abolition of juries, I was not in Government at the time but I fully supported that Act. I had an expectation that awards would drop to a more reasonable level, akin to other countries, instead of being the highest in the world — it appears that it is certainly the highest in Europe. That did not happen. The then Government, as well as many others and I were wrong in believing that it would. This is a great pity but there is nothing we can do about it. So far as the efficiency of insurance companies is concerned, there is a lot of truth in what Deputy Taylor has said. It is my experience that claims departments of insurance companies frequently are anything but efficient. They are frequently the authors of their own misfortunes. A solicitor who appeared for a plaintiff in a personal injuries case within the past few weeks told me that his client was in the High Court for four days in respect of a claim where there were three defendants who were represented by three insurance companies but because the companies could not agree between themselves, even though they were not denying collectively liability to the plaintiff, the case went on for four full days.
That is typical.
That case is going to be very costly for the insurance companies concerned but it is abviously a matter which should have been settled between them and then between them and the plaintiff without going into court because the question of liability did not seriously arise. This is repeated regularly. If companies were more efficient and anxious to settle at an early stage the costs would be much lower.
Mr. Taylor rose.
Perhaps we should move on to Question No. 13 now. Deputy, I do not think we should extend discussion on this question. We must confine ourselves to questions which have been tabled.
I would like to ask a brief supplementary arising out of the Minister's earlier reply. In a sense, I hesitate to ask it having regard to the sensitive position in which the Minister finds himself vis-à-vis the Judiciary at this moment but would he not consider that his suggestions of excessive compensation awards are not well taken and cast a reflection on the Judiciary, under the control of the Supreme Court, who set these standards; that each case is considered on its merits; that the Judiciary are well experienced in assessing awards and compensation under various categories and that the levels of compensation given are in accordance with the law and fair?
That may be but I am not criticising it from that point of view. I am simply stating it as a fact that the levels of compensation paid for personal injuries are very much higher than in most other countries. I do not go beyond that. Obviously the Judiciary feel that that is the way they want it——
That is their constitutional function.
——but if we are going to pay plaintiffs far more than they would get in any other country for a given injury we will have to accept that we will pay far higher insurance premiums than in any other country. That is the case and the two are inextricably linked.
Mr. Durkan rose.
A final question, Deputy. We will have to think of greater efficiency at Question Time.
I have tabled four questions. Would the Minister not consider it incredible that a minor accident, involving £120 worth of damage to a new car, the equivalent of a bump in a bumper car in a fair green, resulted in a personal injuries claim for £6,500 which was dealt with in the courts during the past few days?
I cannot give a judgement on individual cases——
It could have been more.
——but I presume it was our old friend, the whiplash.
Exactly.
It has been found, statistically, that the whiplash is 20 times more prevalent in the Republic of Ireland than in Northern Ireland or Britain.
The Chair will not exercise any whip now and will move on to Question No. 14.
