Vol. 544 No. 3
79 Mr. Belton asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the large increase in insurance premia for business and commerce; and the action she proposes in this regard. [28908/01]
We are fully aware that insurance costs have increased dramatically in the past year. The insurance industry has pointed to a number of factors, both domestic and international, to explain these increases. These include High Court decisions that required insurers to strengthen reserves for claims arising in past years and the global impact of the events of 11 September on international insurers and re-insurers. Under EU law, we cannot intervene in matters of pricing or underwriting of insurance.
Research has shown that insurance premia are high in Ireland because compensation awards are also high. Compensation for loss of income and for medical expenses arising from personal injury is paid for through the private insurance system rather than through the social welfare and health systems, as in other European countries.
The costs of the delivery of insurance compensation runs at approximately 40% of the total cost of claims. The objective of the proposed Personal Injuries Assessment Board, PIAB, is to reduce these latter costs so that insurance costs may also be reduced. The implementation group is expected to report at the end of the year on how the PIAB may be put into operation.
I gather the Personal Injuries Assessment Board is not set up yet. When does the Minister of State intend to set it up? When does he intend to implement the findings of the working group report on personal injury compensation? Is it true that, for the first time ever, there is now a clause in insurance policies stating that, within the year the premium covers, there can be a review of the premium? This is the first time it has happened. Will the Minister of State confirm whether this is true?
The personal injuries assessment board has the full support of Government. An interdepartmental implementation group is working on that and we expect to receive a report from it by the end of this year on how we can proceed. When we receive this report, Government will take the final decision on how we proceed. We are anxious to have it up and running as quickly as possible and the Government is totally committed to it.
As regards the personal injuries tribunal or claims about which the Deputy talked, we hope to refer that, through the workplace safety initiative, to the PIAB when it is up and running.
The Minister of State talked about it.
No, the Deputy asked a question on personal injuries.
The Minister of State talked about it first.
Perhaps I did.
In the past.
I did, of course. My response to the Deputy is that we expect to get the report of the PIAB—
It is the Minister of State's idea.
It is an excellent idea and we are very confident that it will have the full support of this House and the majority of the people because it is there to serve the citizens and to ensure we can deliver compensation to them quickly, efficiently and at a lower cost while not reducing the awards made to them in the normal way. There are many vested interests who do not like the way in which we are going. We hope those vested interests will see the light and that the Deputy will be able to support us in our positive progress on this matter.
The Deputy talked about a condition that has been inserted in insurance policies and where it is alleged that insurance premia could be increased during the subsequent year for which the premia cover was given. That happened in one company post 11 September where an internal memorandum to managers said it would consider that. It was discussed publicly and as a result, I do not think it has proceeded. We have already spoken about this matter with the Irish Insurance Federation and we know discussions took place in the UK. I expect to discuss the matter again in the next week with the Insurance Federation.
What the Minister of State said in reply to my last question was that it is true.
No.
What was the Minister of State discussing then? He said he had discussions about this matter. I ask the Minister of State if it is true because if it is, it is having a grave effect on employment right across the board. I advise the Minister of State that if he is talking, to keep talking to get to the bottom of this issue.
I would not like the Deputy to misinterpret what I said. I have not seen any insurance policy, document or evidence or received any complaint from an individual that this has happened. I read in the newspapers that it was proposed. I discussed it with people in the insurance industry and have been assured by all, except one company, that it was not happening in their operations. The other company does not operate out of this country but delivers services into it. We discussed it with the Insurance Federation which I will meet again over the next week. I will raise the matter again with it but I would not like to give any sustainability to this proposal because it is one I do not like and would not like to happen. It is important to recognise and realise, and I hope Deputy Belton hears this—
Is the Minister of State shouting at me?
I am speaking fairly loudly because I think the Deputy is being distracted. Post 11 September, international reinsurers notified insurance companies of their proposals to increase reinsurance premia within the year for which the insurance companies had already paid reinsurance premia to them. This created a major tremor in international insurance and reinsurance and is something with which I, as Minister with responsibility for commerce, have to deal.
On the public liability issue, does the Minister of State have any contingency plans where serious employment difficulties have arisen? For example, the air companies in America were supported in terms of their insurance commitments. In the event of more serious job losses in this country, does the Minister of State have any contingency plan to deal with that?
I am a bit confused, a Cheann Comhairle, because the Deputy talked about PIAB, personal insurance and new changes in premia costs. Public liability was not asked about in the question. I do not understand the matter the Deputy raises. If he wishes to table a question, I will give him all the information possible.
