Vol. 535 No. 3
9 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which she has approached or will approach the insurance industry with a view to securing a greater degree of competition resulting in lower costs to the consumer, particularly in the areas of motor insurance and public liability insurance; and if she will make a statement on the matter. [12584/01]
Since the transposition into Irish law of the EU Third Framework Insurance Directives in 1994 European Communities (Life Assurance and Non-Life Insurance) Framework Regulations, 1994, insurance companies authorised in any member state may provide insurance cover throughout the EU on the basis of their home country authorisation. This has opened up the Irish market to competition from insurance providers in other EU countries and has increased choice of product to the benefit of the Irish consumer. Currently, there are 27 insurers authorised to underwrite motor insurance in Ireland – a similar number are authorised to underwrite public liability insurance cover. Fifteen companies have their headquarters in Ireland, 11 are based in other EU member states and one is a non-EU insurer. In addition, the removal of the "cap" on brokers' commission will encourage further competition in the Irish market.
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. These include the costs associated with settling personal injury compensation claims and the factors contributing to the cost of premiums for compulsory motor insurance. The establishment of a personal injuries assessment board by 2002 is being pursued by an implementation group on behalf of the Government. In addition, the Motor Insurance Advisory Board will report later this year and I will take whatever further action is appropriate towards the goal of the reduction of the cost of motor insurance. In the final analysis, the pricing and underwriting of insurance is a matter for individual companies and EU law prevents us from intervening in either.
On this matter and a written reply the Minister gave me approximately six weeks ago on the last occasion we had these questions for oral answer, a question broadly similar to the one he has now answered, issued in my name and the reply issuing in the name of the Minister refused to mention that the Minister had on his desk on that occasion a copy of an interim report on the motor insurance advisory board. Why did the Minister hide the report? Why did he attempt to cover up that report which contained startling information and why did he only comment on the report when a request by a journalist in The Irish Times under the Freedom of Information Act achieved publication of the report? What steps is he now taking to facilitate an early completion of that report which I understand can be completed by the end of June of this year if the Minister wills it?
I refute what Deputy Flanagan alleges. I established a motor insurance advisory board of 20 eminent people on coming into office. I found a board in position before that which had not met for four years. It was made up of four people, two from the insurance industry and two from the public service. That board had not met for four years. I established a new board and put 20 people on it representative of all aspects of the motor industry, consumers, young people, professional organisations and public bodies. I charged it with the responsibility to produce a report for me by 30 June last. It did not produce that report and when I sought a report I was told it did not have the necessary information and it sought an extension of time in order to produce a report for me. I told the board I was not prepared to give an extension of time unless it produced some type of report on which I could make a decision. It produced an interim report which clearly said it had inconclusive information and that it could not report factually to me. I extended the mandate of the board to 31 December 2001 and I am awaiting the report from the board. I am confident that we are making progress in this area and I will not publish any document until such time as it is factual and can be stood over by those who produce it and by me.
The Minister concealed the existence of the report.
I refute entirely that which the Deputy alleges.
The Minister has just told the House and I presume it is true that the board told him it was unable to produce a report and it could not get the requisite information. Nonetheless he told the board to go ahead and produce a report. Why did he take that course? Is it not clear from the interim report, now released under the Freedom of Information Act, that it could not get the co-operation of the industry and it did not have the power to oblige the industry to furnish the requisite information? Is it not the case that the Department, so long accustomed to relying on the data furnished by the industry, is incapable of believing that it has been misled down through the years?
Is the Minister aware that there are parts of the country where insurance companies will not even quote or are not interested in doing business for certain people? Has the Minister heard about that in any of his many reports?
Deputy Rabbitte says the Department has been misled for years by the insurance industry. He was in my position prior to my coming into office and I wonder what action did he take to deal with that situation. I established a board and am quite confident we are making progress and will get solid information and produce a good report on which I intend to take action. I cannot take action until I am given hard information which I have not got as yet. I cannot operate on the basis of invisible inconclusive evidence that will not stand up to scrutiny. We must have factual information and I am confident we will get it.
In response to Deputy Belton, I am aware—
Why does the Minister—
From my constant involvement in this issue with both the insurance industry and the MIAB and with the quality of the officials in my Department reporting to me and dealing with this issue I am confident we have been making good progress over the past two years and that before the end of this year—
The board says there was no progress.
That is for me to decide and the Deputy can judge the report when it comes out. I am confident we will produce a good report before the end of the year. In response to Deputy Belton, I am fully aware that there are certain insurance companies in this country who are reluctant to offer cover to consumers in particular parts of the country. We have a situation under the declined cases system where if people who applied for insurance cover and were refused produce evidence to that effect we then go to the declined cases committee and it nominates cover for those people.
Is there no time to ask a further supplementary?
We have already gone over seven minutes on that question. If Deputies would not interrupt when the Minister is replying we might save some time and allow further supplementary questions.
To be honest, it is a crazy system from our point of view – crazy from the Minister's point of view and from ours. Complex questions cannot be teased out like this in a couple of minutes.
