Written Answers. - Insurance Cover.
Bernard J. Durkan
Question:
85
Mr. Durkan
asked the
Tánaiste
and Minister for Enterprise, Trade and Employment if she has satisfied herself that adequate consumer protection exists in respect of insurance cover, with particular reference to motor insurance and public liability; and if she will make a statement on the matter.
[12204/00]
EU generated legislation in force in Ireland since 1994 has had the effect of opening up EU markets, including the Irish market, to competition from insurance providers based throughout the EU. In addition, I believe the removal of the cap on brokers' commission will encourage further competition in the Irish market.
Nevertheless, the level of insurance premiums, especially in the areas of public liability and motor, are still high enough to give concern.
There has been extensive examination of the factors contributing to the relatively high level of premiums focusing on a number of the key cost elements including the levels of personal injury compensation and the costs associated with settling compensation claims. Concurrent with this examination efforts are being made to identify measures which both individually and cumulat ively could have a moderating effect on insurance costs.
The 1996 Deloitte & Touche report on the economic evaluation of insurance costs found that the main contributory factors to rising premium costs were the high legal costs component of small claim settlements, the faster rate of medical cost inflation and the high level of general damages awards relative to special damages in smaller claims.
Following consideration by Government of the Deloitte & Touche report, a special working group was established to advise on the establishment of a personal injuries tribunal and to examine issues surrounding alternative systems of personal injury compensation in operation in other jurisdictions. In 1998, the special working group completed the first part of its remit and recommended a structure for a voluntary mediation system for occupational injuries which could be operated within the reformed courts system.
I have just received the special working group's second and final report on a personal injuries tribunal and I am currently in the process of examining the report and its recommendations.
The Motor Insurance Advisory Board, which was re-established in 1998, continues to provide information and advice on trends in motor insurance costs together with policy recommendations for addressing those costs.
Apart from Government initiatives, greater attention to safety in the workplace and on the roads can further reduce insurance costs. Accordingly, I launched the voluntary code of practice adopted by the initiative on workplace safety group, a group representing the key players in the area of accident prevention and claims mitigation. Also a number of initiatives are in place and are being taken to improve driving standards and safety awareness amongst all drivers including young drivers. The Irish Insurance Federation, in conjunction with the driving instructors register, has introduced a scheme of insurance premium discounts for the young driver on completion of a required number of driving lessons. The National Safety Council, in co-operation with the Garda, continues to promote anti-speeding and anti-drink driving media campaigns including road safety educational programmes for secondary school students.
In conclusion, I am confident that the legislation in place, together with the initiatives on insurance costs, trends, delivery and cover outlined, all help in ensuring that the consumer is protected.
