Vol. 435 No. 9
160 Mr. Broughan asked the Minister for Enterprise and Employment if, in view of the escalation of insurance costs with huge and rising court awards against local authorities, he will take urgent action to end this drain on scarce local authority funds; and if he will introduce new legislation if he necessary.
I would like to remind the Deputy and the House that my primary responsibility as the insurance supervisory authority is to ensure that insurance companies meet the solvency and reserve requirements laid down in statute. The purpose of these financial requirements are that moneys be available to meet claims when they arise. In order to meet these requirements and to operate on a viable basis insures must be free to accept and reject risks and to charge premiums which they deem appropriate in the light of their underwriting experience.
The cost of motor, employers' and public liability insurance in this country is considerably higher than in competing economies. It is clear that the current level of insurance costs in Ireland is a major cost penalty on Irish-based firms and on local authorities. Therefore, the objective, in the current drive to reduce insurances costs must be to achieve a significant reduction in the cost penalty that insurance represents in the interests of employment creation and retention.
I am considering a proposal whereby I will be seeking Government approval to allow me to have a function in relation to one particular and important aspect of insurance costs — i.e. the cost of pain and suffering compensation in personal injury claims.
