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Dáil Éireann debate -
Wednesday, 16 Oct 2002

Vol. 555 No. 3

Private Members' Business. - Insurance Industry: Motion (Resumed).

The following motion was moved by Deputy Hogan on Tuesday, 16 October 2002:
That Dáil Éireann:
– recognises the crisis in the provision of insurance cover in Ireland and the consequent job losses;
– notes the report of the Motor Insurance Advisory Board, MIAB, published in April 2002;
– expresses alarm at high insurance costs and the imposition they impose on consumers, business and young drivers;
– expresses concern at the lack of competition in the insurance sector;
– notes the role of high legal costs in the high level of insurance costs; and
– recognises an unacceptable level of insurance fraud in Ireland; condemns the Government for its failure to tackle the crisis and in particular the complete inadequacy of the measures taken to date and calls on the Government to:
– immediately implement the outstanding recommendations of the MIAB report;
– refer the MIAB report to an appropriate Oireachtas committee to carry out an investigation into the findings of the MIAB and to take submissions from interested parties;
– introduce measures to facilitate greater competition in the insurance market in Ireland;
– introduce measures to reduce legal costs in Ireland: and
– introduce reforms to the system of civil litigation in Ireland.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"recognising:
– that the major determinant of the price of insurance in Ireland is the cost of personal injuries claims;
– the proportion of the cost of claims accounted for by legal and other professional costs; and
– the need to ensure the maximum level of competition in the insurance market;
– commends the action of the Government in undertaking a comprehensive set of measures by a number of Government Departments as contained in An Agreed Programme for Government to bring about a reduction in the cost of insurance;
– recognises the importance of the work done by the Motor Insurance Advisory Board, MIAB, the group dealing with the implementation of the MIAB recommendations and the Personal Injuries Assessment Board Implementation Group and awaits with interest the imminent publication, subject to Government approval, of the work of the latter two groups;
– notes a decline of over 13% in the number of fatalities and over 40% in the number of serious injuries on the roads between 1997 and 2001;
– commends the Government's proposals for the introduction of a system of penalty points for speeding offences from 31 October;
– commends the increased enforcement of road traffic safety measures; and
– notes the enhanced activities of the Health and Safety Authority and the decline in the frequency of workplace accidents."
–(Tánaiste and Minister for Enterprise,
Trade and Employment).
Mr. O'Flynn: This is an issue that has affected every business in the past two years. Insurance premiums have escalated to an unacceptable level in recent times. My company's combined policy of employer liability and public liability has increased by 100% in 18 months. This must not be allowed to continue. How can insurance companies justify such increases for companies that have no track record of claims, particularly when inflation is 5%? Last night we heard about responsible business people who have ceased trading because they could not get motor insurance cover and those who have decided to operate without public or employer liability insurance. Those businesses run the risk of serious financial consequences if there is a claim against them but they prefer to take that risk than lose the business they have worked hard to develop over a lifetime.
Some companies have seen increases of up to 1,500% in their insurance premiums in two years. The Minister must do everything in her power to bring the insurance companies to book. Businesses compete in the marketplace with their goods and services and should not be stymied by the high cost of insurance. Theà la carte insurance coverage offered by some sectors of the insurance industry must cease. They should not be allowed to pick and choose the business they want, such as life or pension cover which carry little risk.
The insurance industry claims that 11 September is a major cause of its problems but I reject this. Insurance in the United States and Britain has increased only marginally since 11 September. The true problem is poor international investment returns on funds invested by insurance companies. People should not have to pay for poor fiscal decisions by fund managers and insurance companies.
Courts order high pay-outs in motor and personal injury claims and, as a result, fraudulent claims are made. The present legal system leads to high legal costs and awards, but to blame the legal profession for all the problems associated with claims is unfair, especially when the insurance companies refuse to settle in many cases and ignore the insured person in every case.
The Motor Insurance Advisory Board exposed the motor insurance industry in its report. It found that in many cases the industry had higher profits than British insurance companies. I welcome the 67 recommendations of the report and I await their implementation by the insurance industry and by Government.
I fear that the personal injuries assessment board, however, may turn out to be a flawed body. Legal costs play a part in the crippling cost of insurance but it must be noted that when the assessment board is set up there will be a right of appeal and a solicitor will know in advance what his client's claim is worth. If he feels he can obtain more by appealing to court he will do that. Solicitors' costs are high and it is important to remember that they must carry the case for the client, as no other business would do. In some cases they must wait years for the case to be heard and if there were not so many delays in the hearing of cases, costs could be substantially reduced.
Exorbitant legal costs arise from the insurance companies themselves. They insist on defending cases in areas where it is obvious that the defendant is at fault, they hold up and manipulate the process and insist on customers not admitting liability at the outset. This bogs down the court system and increases legal costs.
I was amazed to see today that the only mechanism to find out about uninsured drivers is the gardaí. In the Garda report of 2000, it was stated that 11,000 people were prosecuted for having no insurance. We should establish a register of owners of vehicles and those qualified to drive, and check that register against those who are not insured on a regular basis so we can deal with uninsured drivers.

The high cost of insurance is causing major economic and social problems and the impact on the business sector is clear. Most companies face substantial increases in premiums for employer and public liability insurance. This is a key cost for any company and firms cannot afford spiralling premiums.

Unless action is taken the economic consequences are clear. We will lose competitiveness as an exporting State and that reduced competitiveness will be reflected in reduced employment. The impact will be felt most heavily by the small and medium enterprise sector. Jobs are already being lost and more are at risk. We must halt the rampant inflation in premiums and reduce them to a level in line with other European countries.

Motor insurance is a further problem. It is particularly difficult for younger drivers, many of whom find it impossible to get on to the road because of the prohibitive cost of the premiums they are quoted. It is not unknown to hear of cases where the annual premium is more than the value of the vehicle. This has a social consequence because it restricts the mobility of young people, particularly in rural areas where there is little public transport. In many parts of the State, the car is the prime means of transport for most people, it is not a luxury. There is also an economic consequence. Young people are energetic and enterprising and are willing to travel to find work. It is not unusual for people to drive 40 miles into Galway city every morning from surrounding villages to work. The car is the key to mobility for young people, and if they are forced out of the car market with exorbitant premiums they will be forced out of the job market.

It is appreciated that there is a higher rate of accidents among younger drivers but that must also be the case in other countries. The higher incidence of accidents justifies a certain loading of premiums over and above what is charged to more mature drivers, but there is no justification for the premiums being quoted to younger drivers.

The new Government faces many challenges but insurance costs must be a top priority. There is a clear commitment to deal with the issue set out in the joint programme for Government and I am pleased to see the urgency the Tánaiste and Minister for Enterprise, Trade and Employment has brought to bear on the problem in the early months of the Administration. The Motor Insurance Advisory Board report provides a good blueprint for the way forward, setting out comprehensive recommendations, including the establishment of a personal injuries assessment board. I am glad the Tánaiste and Minister for Enterprise, Trade and Employment is making the running by pushing ahead with this idea.

As with all major issues of public policy, change does not come easily. There are conservative forces to be overcome and vested interests to be addressed. I am confident, however, that the Tánaiste and Minister for Enterprise, Trade and Employment has the commitment and courage to resolve the problem and reduce the burden of excessive premiums.

It is appropriate that we are discussing the insurance industry. I have received more correspondence from small and large businesses and young and old people about this than about any other issue. Every sector is feeling the pain of the huge increases in premiums. The two major problems are the availability of quotes and their cost if you are lucky enough to get one. In a number of cases I have come across, people have found it impossible to get a quote and in my own case I received a renewal notice for my car insurance a number of weeks ago which included a significant price hike. Fortunately I have a full no-claims bonus and when I rang to inquire about the hike I was told that all the company's customers had received a 40% increase in their premiums. I had no accident in nine years with this company yet it was prepared at the stroke of a pen to add 40% to my premium. I was fortunate to succeed in finding insurance at half the price elsewhere, but others have not been as lucky.

I know a gentleman who runs an unusual type of business and was made almost redundant as a result of the foot and mouth disease crisis of last year. He sought to cancel his insurance at that time and was told that if he did so he would not receive a quote from the company this year. He continued to pay, but when the time came this year the company refused to quote. That behaviour is not acceptable and we cannot look at EU law and say that we are restricted in what we do. It is important that we take action and refuse to allow companies to abuse their customers in that fashion. A young joiner I know who does wonderful work and employs a number of people cannot get insurance and in a few days he will have to let those people go. Many young people have expressed their concern about insurance and the way it is going and the system we have in place means that they are presumed guilty before they can prove their innocence. Huge premiums are sought from them and they often find that their insurance costs more than their car, which does not make sense. The Government is aware of the seriousness of the problem as is quite obvious from the programme for Government drawn up between the two parties which includes a number of measures to deal with it. The Minister has explained that her purpose is to bring about an improvement in the functioning of the insurance market and the system itself. God knows, it needs to change considerably.

Last April, the Motor Insurance Advisory Board published its report, a very thorough study of the industry. It made a number of recommendations on foot of which the Government set up the implementation group. I listened to the chairman of the group promising action within four months and while 67 recommendations and a plan are in place, as far as people are concerned action cannot happen quickly enough. People are losing their jobs and closing their businesses because they cannot get cover, which is simply not good enough. We in Ireland, or Europe for that matter, cannot be asked to pay the price for what happened in America and for poor investments. There are not that many insurance companies in the world and it is wrong that they should pick out a small market. It appears that Europeans are being asked to pay for the difficulties insurance companies are experiencing at the moment.

I ask the Minister to treat this as the number one priority within her Department. It is a very serious state of affairs and enough analysis has been done. We know where the problems are and action is required to ensure that insurance is available to everyone who seeks it at a competitive and realistic price.

I disagree with the contention of this motion that the Government has failed to tackle the crisis in the insurance industry. The motion seeks to divert attention from the real problem with our insurance culture by concentrating on what additional regulations and lengthy reports the Government should introduce to solve a problem which every Member and the public knows cannot be solved overnight. The motion seeks to have the Government introduce measures to reduce legal costs, a noble goal which would no doubt have popular support but would end up as an expensive show in the courts. With regard to the call to increase competition in the marketplace, everyone in the House knows that if there was a profit to be made, EU-based institutions would have long since lobbied for access to any part of the market barred to them.

Regarding the referral of the MIAB report to the appropriate Oireachtas committee, my first instinct was to support the Minister for Enterprise, Trade and Employment and her Department in getting on with its timetable of reform and its investigation into the industry. If there was a failure to respond in that regard, the Oireachtas committee would then be the most effective forum for examining why the industry failed to participate in solving what is a national issue. However, having reflected this evening I take the view that the report should be referred to the appropriate committee and I will be telling the Minister that I support that position.

Insurance costs are excessive. I am not so much a victim, though I have been aware of the cost of insurance from my car ownership. Only 132 days ago I was privileged to become a Member of this House and I am still in the learning process. I decided to open a full-time constituency office which would house my secretary, a part-time assistant and myself in the heart of Tallaght and I was amazed to be told that the insurance cost would be almost €1,200 a year. Some of my people tell me I am being hammered by the insurance companies. That brought home to me, as do the yearly car insurance renewal forms, the difficulties we all face. As with my colleagues, I attend many business events – in my case all over Dublin South-West – and I am constantly made aware by businessmen from large and small concerns of the impact of insurance costs on their enterprises. It is an issue in every constituency.

As a Deputy representing Dublin South-West, which embraces Firhouse, Greenhills, Templeogue and Tallaght, I have found that the main subject I speak to young people about is the cost of their car insurance. That was the case during the election campaign and it still is. As I go about my business in the constituency seeing people in The Square and other places, this is the thing that people want to talk to me about. It is right to articulate their concerns in the House and represent their interests. In most cases the insurance cost equals the cost of the car which is needed to get people to work. The questions are always "why so much?" and "what are politicians doing about it?". When I explain in detail, as I always do, the measures being introduced by this Government there is a general understanding that the solutions will not come overnight and that in the medium term the cost and availability of insurance will improve.

The programme for Government commits the Administration to tackling this issue and the actions of the Minister in bringing forward measures quickly shows her personal commitment as well as that of the Government's to addressing the problems we face. The report of the Motor Insurance Advisory Board is an example of this commitment and the urgency with which the Minister and the Government wish to implement its recommendations is underlined by the development of the personal injuries assessment board. I fully support the actions of the Minister and the Government in their work to date in tackling the cost and availability of insurance and I look forward to contributing to future debates on these matters.

I welcome the opportunity to say a few words on this issue. It must be a top priority to deal with insurance cover. Usually the motion and the amendment are in conflict, but there is much in common between the two on this occasion. We all recognise the huge impact this problem has on our families, the population and on every aspect of Irish life. We must do something about it. The problem has mushroomed in the past 12 months. We are being ripped off and there are many contributory factors. We must get our house in order. Local authorities, for example, must deal with matters such as road works, etc.

We must also change the culture associated with the insurance business which revolves around cash. There is plenty of funding available for insurance purposes, whether it is for professional fees or work done. If car repairs or panel beating was required to be done 30 years ago as part of an insurance claim, it was treated differently from every other job. Such jobs were set aside as special income. It was treated in a cavalier fashion. The problem is that people seem to think insurance money comes from a hole in the ground or a golden trough. However, we all contribute to it. We must deal with this issue.

It is scandalous that the lower the risk, the higher the premiums being quoted. The Government's amendment refers to a decline of more than 13% in the number of fatalities and more than 40% in the number of serious injuries on the roads between 1997 and 2001. The rate of fatalities per thousand people at work in the construction industry fell from 15.07% to 7.77% between 1998 and 2001. There was a similar percentage decrease for accidents in the construction industry, despite the fact that the numbers employed increased from 126,000 to 180,000. It does not seem to matter how much we reduce the risk because the insurance companies continue to increase the premiums.

An article in The Guardian last week referred to mutual concerns and the fact that status is not a protection against the collapse of shares. It referred to mutual insurance companies and how they are getting into trouble. As Deputy O'Flynn said earlier, we cannot be expected to pay for that. Certain categories of people may be put out of business, such as scaffolders and roofers. There is an increasing number of professional people in the wrong job on any given day. Medical consultants, for example, are spending their time in court rather than in the operating theatre. Evidence can be taken in different ways. There is room for the introduction of a book of quantum and for a range of improvements. I am glad the Minister is dealing with that.

I am disappointed with the delay in publishing the report of the insurance group. I blame the insurance companies for that delay, although I do not know if it was deliberate. We must deal with that report. This is not only an issue for the Government or the Opposition. It affects everyone, including our constituents and families. I compliment the Minister on the work which has been done to date. I would like it to be speeded up if possible. We must go head to head with the insurance companies and take any necessary legislative action.

The high cost of insurance is one of the most critically important social, economic and political issues of the past ten years. Whether one is trying to operate a business, put a car on the road or insure the contents of one's house, the high cost of insurance is prohibitive. It puts huge financial strain on individuals. In the same way our penal tax rates in the 1970s and 1980s fuelled the growth of the black economy, the high cost of insurance is a major contributory factor in the increasing number of non-insured activities. This is a cost spiral which in the past 12 months is having a major negative effect on growth in the country.

What are small foothills in many other countries seem to be insurmountable peaks in Ireland. People are now asking if they can afford to put a car on the road or if they will bother claiming for a small accident. They are also asking if they can afford to insure their staff and customers. Unfortunately, the answer to all those questions is no for many people. Insurance costs are so high that for many reasonable people they represent extortion, a rack rent or a hold up without a gun.

Insurance costs are one of the single biggest factors that could prohibit the growth of Irish industry, particularly small industry which is already under pressure. Many reasons have been advanced by the industry as contributors to the current insurance problem. The 40% claim increases to which Deputies referred are not unusual. In Ireland the difficulties are manifested by poor investment returns. Many insurance companies invest their turnover in equities, but we are experiencing a five year low. There are also substantial increases in reinsurance costs and reduced capacity in the global reinsurance market. Other contributory factors are the high level of claims and awards, legal costs and the method for determining them along with the failure to prosecute fraudulent claimants. The problem is most acutely felt by drivers and by small and medium sized companies who cannot afford the almost penal levels of public liability insurance.

An Agreed Programme for Government, agreed between the Progressive Democrats and Fianna Fáil, gives a clear commitment to tackle the high cost of motor, personal and employer liability insurance. These commitments make up an operational insurance reform programme which will be implemented across a number of different Departments. The Motor Insurance Advisory Board, which reported earlier this year, was a major step forward in recognising all the elements of the problem. That the report contains 67 recommendations highlights the depth of the problem. I welcome that the Government implementation group is drawing up an action plan to tackle the issues which will go to Government in the near future. I also welcome the stated objective of the Personal Injuries Assessment Board which is to make available alternative adversarial legislation where the liability is not disputed, but an independent assessment of compensation is required. The implementation of this group will also be considered by Government in the near future.

The lack of a competitive environment in the insurance market is also a contributory factor to the high cost of insurance. The Department of Enterprise, Trade and Employment, in conjunction with the Competition Authority, has commenced consultation for a study of competition in the provision of non-life insurance, specifically focusing on motor, employer's liability and public liability insurance in the market. Such a protracted problem needs major political will and determination to solve it. I commend the vision and political will of the Minister in pursuing this issue.

She has been there for five years.

She has accepted full responsibility in her new role. More than ten years ago Dublin was covered by a thick blanket of smoke.

There is still smoke over it.

We could barely see where we were going, but no one could find a solution.

A fog is developing over the Government now.

There is a lot of frustration on that side of the House. Deputy Harney accepted the responsibility and banned smoky coal. The cloud then disappeared.

The Government should ban cars and businesses.

I have no doubt she will use the same vigour to lift the black cloud over the insurance market.

I wish to share my time with Deputies Upton and Lynch.

Perhaps the greatest problem facing our economy is the appalling and devastating impact of insurance costs on all our lives, whether as individuals, communities or business people. Since the general election, every Member has been inundated with e-mails, letters and visits from the owners of small businesses pleading desperately for action to be taken in response to the appalling insurance quotes they have been receiving.

In recent days in my constituency, a one-man business seeking public liability insurance, a window cleaner, discovered that his quote had jumped by 100% for the forthcoming year, while the employer's liability insurance of another small company, a window replacement firm, jumped from about €8,000 last year to €28,000 for the coming year. These type of rises in premia are typical.

People have also tried to come to grips with the problem on an individual level. While I could quote from many of the messages I have received, I will confine myself to one sent by a constituent yesterday evening in which she states:

I write in connection with my insurance premium. Last year I paid approximately £900 for myself, my husband, and two of my children, one female aged 23 and one male aged 21. Both had full clean licences with no previous claims or endorsements of any kind.

This year despite having no claims during the year I have been quoted €2100, an increase of approximately 80%. When I inquired about this, I was told it was because of the age of my children. Yet I had no difficulty adding them to my insurance last year.

She goes on to relate how perplexed and irate she is about the matter. Her letter is typical of what has been happening throughout society.

Many politicians are members of community forums – I am the director of several community companies – which have also faced year on year rises of 100% in public liability insurance. The reason for this is that sometimes our legal representatives and insurance brokers are simply not willing to contest a claim, such is the climate engendered in society regarding claims. For community bodies, this means having to invest hard work as volunteers to raise the money required. We do not even have the cashflow available to ordinary business.

In recent days the joint managerial body of our secondary schools has also complained bitterly about the devastating increases in schools' costs caused by rises in public liability insurance. JMB general secretary, George O'Callaghan, informed me that these increases are between 25% and 60%. The only option open to school administrators is to turn to the Minister for Education and Science and the Minister for Finance and request some redress.

We have arrived at an appalling position, the impact of which has been devastating on the entire economy. In recent months, many businesses have told me their only option will be to try to claw back some of their insurance costs against their tax bill. This is one recourse to which shell-shocked small businesses will resort this year in order to get by. As indicated by the proceedings this afternoon, Members are concerned about falling tax revenues. Corporation tax, for example, is due to decrease again. The small business group, ISME, has calculated that 96% of small businesses have had rises in public liability and employer's insurance this year, averaging 71%. These increases have led to a fall of about 20% in their overall workforce. The Tánaiste reported to the House on this survey a few weeks ago.

In terms of tax revenue, falling employment and the general rise in costs to society, recent developments have been a total disgrace. The leader of the party to which the Minister of State belongs has had a very central role in this process, having been Tánaiste and Minister for Enterprise, Trade and Employment for more than five years. Throughout the last Dáil she left the responsibility for the critical area of commerce in the very unsafe hands of a very affable Deputy who was, however, a highly incompetent Minister of State, namely, Deputy Noel Treacy. For five years he kow-towed to vested interests in the insurance industry and the legal profession and refused to take action. He even managed to lose the first interim report of the MIAB. The report was later put on the back-burner and he pretended its central findings were ludicrous and did not add up. For five and a half years we listened to the mantra that progress would be made.

As the end of the rainbow Government approached, Deputy Rabbitte, who was Minister of State with responsibility for commerce, pursued the issue of insurance and was in the process of establishing an implementation body to implement the findings of the personal injuries assessment board. These plans date back to April 1997, yet here we are nearly six years later and the findings of the board have still not been implemented. Moreover, the Tánaiste is still talking about establishing the board on an interim basis. There is a real case for calling for her resignation, such has been her lethargy in the past five years in not pursuing this key element of our costs. Nothing has been done.

Every time I contact the Tánaiste about businesses in my constituency, as I have done endlessly in the past two or three years, she sends me the same letter which, I am sure, other Deputies also receive. I can nearly recite its contents by heart. She first lists the reasons for the difficulties in the insurance sector, namely, the level of claims, the increasing level of awards, poor investment returns to insurance companies and so on, all of which we have heard before. After this, she always states that:

The pricing and underwriting of insurance is, however, a matter for individual insurance companies. EU law prevents us from intervening in relation to the matter of premium levels or in respect of what risks insurance companies are prepared to underwrite.

Her statement is utter hogwash and nonsense and the Minister of State, who is an accountant, knows it. We do have the powers to set in train very significant measures to tackle high insurance costs. My colleague, Deputy Rabbitte, when he was party spokesperson on this issue, made one simple suggestion to the Tánaiste which she never took up. Noting that the MIAB report showed that young drivers, contrary to what we had previously believed, were being ripped off by as much as 1000% and that insurance companies here were making 11 times more profit from this group than were their British counterparts, he proposed asking Mr. Niall Crowley and the Equality Authority to begin a statutory inquiry into the matter, as it is entitled to do. Such an investigation could call for papers and documents to be produced to look into the insurance industry and the way in which it discriminates against young men and women and older drivers.

That simple proposal could be accepted tonight by the leader of the Minister of State's party. Year after year, however, she has refused outright to do so. Why? Could it be that the vested interests in the legal profession and the insurance industry exercise a major influence on the Progressive Democrats Party and the Fianna Fáil Party, to the extent that both are afraid to take on these vested interests who are crucifying our people, businesses, schools and communities? They have left us in a desperate crisis. For this reason alone the Government should not have been returned. Its re-election was an outrage given its dramatic failure in this area.

I ask that my colleagues address some of the other problems arising in the area of insurance. It is now time for action. We have had the so-called action plan launched with great fanfare by the Minister a few weeks ago. At the time I called it a damp squib and Deputy Hogan described it in similar terms. What has been achieved? What has been done? It is vital that the Minister finally starts to take the issue seriously. She talked a great deal about referring it to Dr. Fingleton and the Competition Authority. Why was such a plan not implemented three or four years ago? Why are we still waiting for the Minister, Deputy Harney, to take action on possibly the most important area of her portfolio? Her plan is belated. This plan should have been implemented years ago, as it will not have sufficient impact when it is finally implemented. We need an urgent plan of action.

I commend the Irish Insurance Federation on suggestions it made, particularly regarding fraud, requiring a sworn affidavit and an RSI number on every claim and addressing the outrageous legal fees we permit. We cannot allow the insurance industry to continue to operate as it has been. If a Deputy on this side of the House had been responsible for the management of the insurance industry, as the Minister has, Fianna Fáil and the Progressive Democrats would be calling for that person's resignation. It is past time that the Minister took action.

I welcome the opportunity to support this motion. The cost of insurance is virtually at crisis level, this issue is raised with me like Deputy Broughan on a daily basis. I have had to set aside box files to take account of the number of letters I receive on it.

I want to address the area of motor insurance. It has been widely debated inside and outside this House to the extent that, in the general election, a number of constituencies put up insurance candidates specifically to deal with the issue of car insurance. Unfortunately, the position has not improved. It is a crisis for young drivers who are unlikely to get a quotation or, if they do, they will not be able to afford the exorbitant premium quoted. Many young people are dependent on having a car to earn their livelihood, not to mention the minor detail of having some kind of social life.

The victims of exorbitant insurance costs are the most vulnerable. They have been sidelined in all the discussions on processing the accessing of insurance. Car insurance for young drivers increased at the rate of about 80% in the past year. Many young people cannot avail of public transport. A number of rural Deputies mentioned the problems facing young drivers in rural areas. This is also true to a great extent in the Dublin area. I know of many young people who would be happy to avail of public transport in Dublin South-Central, but it is not at all adequate. Therefore, they have no choice but to pay exorbitant insurance costs. We need to address the issue of public transport as a backup to addressing this issue.

I wish to address the problems regarding penalty points and the introduction of a substantial response to that issue. At long last we have a commitment from the Minister for Transport, Deputy Brennan, to address this issue, but until we have a substantial road safety policy in place we will continue to have unsafe driving practices on our roads. A consequence of that will be more accidents and a consequence of that, in turn, will be increased insurance costs. Many bright ideas have been mooted about road safety practices, but they have not been implemented. We need to stop talking about this matter and get down to introducing legislation and doing what needs to be done to change the position.

The high cost of car insurance is not only due to poor driving habits, the lack of significant competition in the insurance business has been highlighted in the MIAB report. That must be tackled as a matter of urgency. Insurance companies appear to be able to make the story up as they go along in terms of the premiums they decide to charge. Unless there is significant competition in the industry that practice will continue.

Small businesses and industries have taken a major hit due to the high cost of insurance. Like many Deputies who raised this point, I too have received a large number of letters and representations from many people in small industries who have suffered significantly from being unable to get insurance or from the exorbitant cost of insurance. As an alternative to paying these exorbitant charges, some of these people highlighted that some companies are reverting to the unfortunate practice of dispensing with insurance. They are operating on a wing and a prayer and hoping nobody will have reason to take a claim against them. This practice is unacceptable, but one can understand why people are driven to do that. Others are in the unfortunate position of having to let employees go, another practice which is unacceptable in terms of the development of the economy apart from anything else.

Another group mentioned by my colleague, Deputy Broughan, was the voluntary and community sector. Those people provide a valuable service at personal inconvenience. They have to raise funds to pay their insurance costs. These will be the first people to drop off the end of the list because they cannot afford to raise the price of insurance charges. As a consequence of that the most vulnerable will suffer, as this sector will not be able to provide such valuable support and facilities.

The Minister stated last night that we have had an excellent analysis of the reasons for our high insurance costs and the focus must now be on action. I could not agree more with her on both counts, but the action must be sooner rather than later. Action needs to be taken in a way that restores trust in the insurance business, that young responsible drivers will not be discriminated against, that affordable insurance becomes the norm rather than the exception, that small industries remain viable and that voluntary organisations can continue to provide a valuable service to the community. I would like a timeframe set for those targets and to know when we can expect delivery in respect of them.

I thank the Deputies for sharing their time with me. A meeting was called in Cork in September at which the CIF and the trade union representatives for the construction industry got together and asked the Deputies representing the area to meet them. Deputies might ask what was unusual about that, but that was quite unusual. The CIF and the trade union movement are seldom on the one platform, but in this instance they were and they had their facts and their figures. They were concerned about insurance costs. A difficulty that has arisen in Cork and elsewhere throughout the country is that approximately 12 small construction firms have gone out of business because they could not obtain a quote or, if they did, they could not pay the premium quoted. Approximately 100 small construction firms are under threat of closure because they cannot obtain insurance. We all know the construction industry is dangerous, by its nature it is hazardous, but it has taken tremendous steps to clean up its act and try to ensure it is less hazardous for those who work in it. However, that does not appear to matter. Certain firms who have never had a claim brought against them have gone out of business because they could not afford insurance.

A Government Deputy said that high insurance costs are all our responsibility. The issue of insurance, how we claim, how it is dealt with, the courts, the costs and the medical expenses is multifaceted. We all know there is no single solution to this problem, but it is Government's job to solve it. It is not our job or the job of the people who cannot get insurance to solve it. They know what the solution is, the effect high insurance costs have on their industries, but they know that only the Government can solve the problem.

As Deputy Broughan outlined, the Minister said that because of European law we are hamstrung and cannot take action to resolve this problem, but that is not true. We have been awaiting a report on this issue for five years. As Deputy Broughan said, when it was published, it was lost. It was put on the slow burner and did not go to Cabinet. It was not available, but suddenly half way through the general election campaign the report appeared, as if manna from heaven. Every door to which I called during the general election if not opened by a driver was opened by a mother, father or wife and they wanted to know why young people could not get insurance. One would imagine we were living in a Utopia where there was public transport by which one could set one's watch, but we all know that is not true. Cars are no longer a luxury, but a necessity. As long as the Government refuses to invest in public transport they will remain a necessity. I know a man who passed his driving test at 19, has a clean driving licence and has never made an insurance claim. He is now 29 and is still on his father's insurance as he cannot get insurance of his own. A man who should be independently living in the community cannot get insurance to drive his own car. If the Government does not tackle all the facets that have contributed to companies closing and to young men tak ing risks on the road without insurance, then it does not deserve to stay in power.

I wish to share time with Deputies Connaughton, English, Paul McGrath and Ring. I congratulate Deputy Hogan for putting this important issue on the agenda. While canvassing in Carrickmacross on Tuesday morning I met a woman whose son was quoted €6,500 for motor insurance. She told me she would not be able to vote because her son needs her car to get to his job. Deputy Power and others on the Government benches made it very clear that they are as frustrated as we are. For the sake of young people I hope they have the wit not to split this House on a vote but to agree to take action. We want action, not political stunts that pretend this is not a real problem.

Deputy Noel Treacy was the Minister of State in charge of this for the last five years. He oversaw the production of a report which was four and a half years in the making. I agree with everybody that it is an excellent report but it is untenable to ask young people or business people to wait four and a half years to get insurance. I welcome the Tánaiste taking responsibility for this in the Administration. For all our sakes, I hope the final comment of Deputy Parlon does not turn out to be a damp squib, though I am afraid that may be the case. I hope she takes action and does not simply convene another committee or commission another report. The ISME clearly stated that insurance costs are a serious problem and are going to put many small industries out of business. Taxi drivers, builders and community groups are all affected.

Listening to some Ministers one would think this is a new Government. This Government has been in power for the past five years. The Minister held a fancy press conference some time ago. We do not want fancy press conferences, we need action. The action required has been clearly spelled out in this motion. The motion calls for the immediate implementation of the outstanding recommendations of the MIAB report and for it to be referred to the Oireachtas committee to carry out investigations into it including the taking of submissions from interested parties. It further calls for the introduction of measures to facilitate greater competition in the insurance market and measures which will bring a reduction in legal costs.

Each Member knows of a number of cases where insurance companies have either refused to insure or raised premiums to such a level as to make them unviable. Small firms are being forced out of business. I know of a company which took over another company only to be told by their insurers that insurance was not available. This is a crisis which must be handled immediately, with no more reports or press conferences. There must be action to curtail legal costs and allow competition to develop which will allow people to insure their cars, homes and businesses.

I congratulate Deputy Hogan for tabling this very important motion. Thousands of people feel helpless, annoyed, disgusted and irritated that what was once perceived to be normal insurance cover at an affordable price seems to be gone forever. Insurance has now gone beyond the reach of individuals, firms, community groups and a host of other parties. The country is teeming with instances where insurance is either not available or is so financially prohibitive that small firms are reducing their workforces to stay in business. Many firms are under-insured, which is the worst problem of all.

Fraudulent claims are a source of great irritation. Many business people are fed up to the back teeth with it but nobody seems to want to do anything about it. Irrespective of who is to blame or where liability lies, it appears that for relatively small claims insurance companies will collapse like a paper bag and accept them. They do so because they do not want to incur large legal costs. That might be all right on the day, but the insurance companies themselves have created a compensation culture. Bogus claims are spreading like wildfire across the country. People that cheat in this way are no better than drug pushers. There should be a very severe jail sentence for people who make bogus claims. Like all other Members, I can reel off countless incidents of increases in insurance premia from 50% to 500%.

Deputy Crawford spoke about a crisis. Spiralling insurance costs is more than a crisis – it is a stick of dynamite that is going to cause the economy to blow up in our faces if we do not do something about it shortly. I know of a scaffolding company in Navan that had an insurance premium of €20,000 last year and cannot get a quote this year. They are willing to pay €100,000 but they cannot even get insured for that. I know of another builder whose insurance was €25,000 last year and €75,000 this year. In some cases motor insurance has gone up from €3,500 last year to €5,000 this year. I know a man whose garage caught fire last year who cannot get a quote for insurance this year because he is considered a high risk. It seems to me that if one's garage was burned once the chances of it catching fire again are slimmer. Taxi drivers are also being put out of business.

We have to investigate if taxis and other high-risk trades such as carpenters, builders and other craftsmen are suffering from unnecessary profiteering or are being deliberately priced out of the market. High insurance costs do not provide an incentive for people to make a blind leap of faith in starting their own business or expanding their existing one. Small businesses have already started to fold and more will follow if the Government does not act decisively. Business closures will lead to job losses and there will be a resultant drain on social welfare. This will also lead to decreases in PAYE and corporation taxes. Everyone wants and needs a job and is entitled to one as it provides dignity and self esteem. The loss of jobs is bad for families, communities and ultimately the public finances.

The crisis in the motor insurance industry is certainly not new – it is nearly as old as I am. When I was 18 and taking out insurance for the first time, I was informed that the cost would be high but that it would decrease when I reached the age of 20. Having paid a few thousand pounds for insurance in the intervening years, I was looking forward to a reduction on my 20th birthday but I was charged £2,500 and told that it would decrease when I reached the age of 23. However, I am now paying over €3,000 and I have been told it will decrease by the time I reach 30. At the rate it is increasing, I am not looking forward to turning 30.

This crisis did not develop overnight and I am tired of being told that the events of 11 September 2001 is the reason for it. That is a disgrace and it is shameful for any insurance company to use 11 September as an excuse. How did the crisis first come about? The Government should hang its head in shame over the revelation from the Motor Insurance Advisory Board that legal fees represent 42% of premia as compared to the EU average of 10%. The figure is as low as 2% in Sweden. With apologies to Deputy Enright, the legal eagles are getting far too much money. When one considers the figures, it is easy to see who the Government really represents. These figures were never a State secret. Despite representations from the Motor Insurance Justice Action Group, from me and many others on this issue, the Government has chosen to ignore it. As a 24 year old I resent this because it is not good enough. It is my, and every other young person's, right to drive a car. We need a courageous Government to wield the axe and cut through the cartel operated by the legal profession.

I am not optimistic for the future. The previous Fianna Fáil-Progressive Democrats coalition was the longest serving Government since the Second World War. However, I would label their term of office an era of missed opportunities with regard to insurance. A car is an absolute essential in this new age of commuting because people sometimes have to travel very long distances to work. More importantly, cars are the lifeblood of small rural communities in my native Meath and many other counties throughout Ireland. For many elderly people, those who live in isolated areas and farming families, they provide the only means of contact with the wider world. Bearing this in mind, it is, therefore, wholly unnatural that any Government should knowingly preside over five years of increases in car insurance. What the hell is the Government thinking about?

I commend Deputy Hogan on bringing forward this motion and I hope at the end of the debate the Government will have something constructive to offer. The Minister of State, Deputy Michael Ahern, will address the House shortly and I hope he will outline the initiatives the Government is going to take in respect of insurance.

There is a major problem in the area of insurance and this was one of the major points of interest in the general election campaign when one was talking to individuals, particularly young people, who are experiencing difficulties obtaining car insurance. Young people need cars to travel to work because they need to be mobile to take advantage of the employment opportunities on offer. These individuals need transport but the insurance costs they are expected to bear are enormous.

Household insurance has risen by approximately 35% in the past year. The insurance on my small constituency office in Mullingar rose by 39% this year. That is a large outlay on a property in respect of which I have only made one claim – it amounted to £700 – when a window was broken by late night revellers or, perhaps, disgruntled constituents.

Insurance costs have risen across the board. Small community groups and GAA clubs are experiencing enormous difficulties in insuring their premises. A previous speaker referred to the problems encountered by taxi drivers. I met a taxi driver who had previously paid £3,000 for insurance and who was involved in an accident which was no fault of his own. His insurance premium was immediately increased to £10,000 and he had to get out of the taxi business as a result. That is not satisfactory.

Deputy Hogan outlined some of the difficulties experienced by the business sector. I am familiar with a thriving business in my home town which paid £45,000 in insurance costs three years ago. These rose to £87,000 the following year and last year they increased to £145,000. This meant that the company had to increase its turnover in a three year period by almost £1 million if it was to meet its insurance costs. That is completely unacceptable. The net outcome will be that the company will have to lay people off, which is not satisfactory. It has a claim pending at present, but, as the managing director stated, people pay insurance costs to meet claims they may have to make and if the company has to pay for the claim itself in the form of a hugely increased premium, then it might as well not have insurance. It is difficult to argue with his assertion. One pays insurance so that when the rainy day arrives one is covered, and it is not right that there should be an enormous hike in insurance costs when a claim is made.

The Minister announced recently that she will take action. However, the time for announcements has passed. What we need now from the Government is action. It has been in office long enough and it is time something was done.

I compliment Deputy Hogan on bringing this motion before the House. I am glad he did so because this matter is a topic of conversation throughout the country. The two greatest difficulties businesses and young people face at present are public liability and high insurance costs.

I receive telephone calls from parents who live in rural areas about this matter on a daily basis. When their children turn 18, 19, 20 or 21, parents believe that they should be able to look after themselves. People in rural areas need cars to travel to work or Mass or to bring their children to school because they do not have access to the DART or the public transport system available in our cities. It is outrageous that people who purchase cars for €3,000 or €4,000 are obliged to pay €6,000 or €7,000 to insure them.

Governments must govern when the time comes to do so. This Administration has been in power for a long period but it has failed to deal with this problem. Legislation should be introduced, if necessary, to oblige every insurance company to take a quota of young people on to its books. If any of these young people were involved in accidents and made claims, they could be made remain with the company for 20 years and not allowed to seek quotes from other companies. What is happening at present is wrong because we are penalising young people before they start out in adult life. We should encourage and help young people by giving them opportunities. The individuals who do not avail of those opportunities should be penalised and should be obliged to pay high insurance costs if they are involved in accidents.

The cost of public liability insurance is outrageous. A man who serves on the local council with me was not even given a quote by the company he had been with for ten or 12 years. He had never made a claim but he suddenly received a letter from the company which stated that it was not even going to provide him with a quote. Legislation should be introduced to protect that man who paid his dues and never made a claim because when he needed cover, he was almost put out of business. That should not be allowed to happen.

We have returned to the bad old days. The Government recently promised that the Irish soccer team's match this evening would be broadcast on terrestrial television, but what has happened? I am sure the Taoiseach and his Ministers are in the best seats in Lansdowne Road, but the poor people of Ireland, despite the Government's claim that it would resolve matters, are missing out on the opportunity to watch the match because RTE has been prevented from covering it.

Members may ask what this has to do with insurance. We were promised that difficulties with insurance would be dealt with but that promise has been broken. We were also promised that tonight's football match would be shown on terrestrial television, and that is another broken promise. The Government informed us that the then Minister of State, Deputy Treacy, would deal with the matter which is the subject of this motion, but that promise was also broken. We were also informed that there would be no increase in third level fees, another broken promise.

How can we believe that the Government will deal with the most serious problem this country faces? What will I say to the woman who phones me tomorrow and asks how she can obtain insurance for her son who works in a rural area and needs his car, which is the only vehicle the family owns? All I will be able to tell her is that the Government has promised to do something and she will ask how we can believe an Administration that breaks promises every hour on the hour.

I hope the Minister of State is in a position to give us some positive news. I also hope he will inform the House that he will deal with the insurance companies and that he will bring forward the necessary legislation in order that Deputy Hogan will not be obliged to table another motion of this nature. I further hope that companies will be able to remain in business, that insurance will be controlled by the State and that insurance companies will no longer be in a position to control the people, which is wrong.

The Minister has to do something. If there were good news tonight, Deputy Harney would be here. When there is good news about jobs, she is in Longford, Cork and all over the country. Even when the report was published the Tánaiste was on television with the advisory board and, of course, our great friend RTE had as its main news headline that something would be done. What has been done? Nothing, and nothing will be done until there is a new Government and Deputy Hogan, as Minister, is on the Government benches dealing with this serious problem.

The Tánaiste has landed the Minister of State, Deputy Ahern, with another fine mess.

With regard to promises, that great friend of Fianna Fáil, Fergus Finlay, said we were an absolute disgrace during the election campaign in that we made no promises.

Read the literature.

I thank Deputies for their contributions to what has been a constructive debate. It highlighted, if that was necessary, the high cost of insurance, which has major implications not only for business but also for community and sports bodies, local authorities, motorists, householders and many other sectors of society. This has led to the establishment of single issue groups to campaign on the issue of insurance cost increases, such as the Business Insurance Alliance, the Alliance for Insurance Reform and the Motor Insurance Justice Action Group.

There is a high level of agreement on the reasons for the increase in insurance costs. There is a general acceptance of the analysis, conclusions and recommendations contained in the report of the Motor Insurance Advisory Board. We have a societal problem which will have to be addressed by society. This includes insurance policy holders, insurance undertakings, the courts, solicitors, barristers, other professions, a number of Departments and, possibly, the Oireachtas. For policyholders there is a clear need to reduce the level of accidents and to improve our safety record. The Government will continue its efforts to reduce the level of accidents on the roads, at work and during non-work activities.

We intend to pursue vigorously a concerted programme of action to reduce insurance costs. The central planks of this programme will be the action plan prepared for implementing the recommendations of the Motor Insurance Advisory Board and the establishment of the PIAB interim board. The action plan identifies who should undertake the specified tasks and incorporates a timeframe for implementation, together with the insurance industry's estimate of the potential impact of implementation on claims and premia. The PIAB interim board will enter constructive discussions with interested parties to further the objective of a fair and efficient compensation system for the victims of accidents.

I wish to respond to a number of matters raised during this debate. There has been rationalisation in the Irish insurance industry. This has resulted essentially from mergers and takeovers taking place in other EU member states where the competent authority to clear the takeover or merger is the European Commission. It is an area in which we will become more active in the future.

A major concern is the failure of insurance undertakings with head offices in other member states to sell business into Ireland. Discovering and analysing the reasons for this is one of the main attractions for the Department in the study of the competitive situation in the Irish insurance industry. We can speculate on the reasons or reservations insurers may have about entering an unfamiliar market, especially such a small one, the common law system and the apparent high insurance claims cost but we need hard information. The reason for undertaking the study is also influenced by the economic importance of the sector, indicators of the level of competition in the sector and the extent of public interest in the sector. A preliminary consultation document has been launched to invite submissions before the terms of reference for the study are finalised. Interested parties should make submissions to the Competition Authority before 1 November next.

Under EU law, the pricing and underwriting of insurance are matters for individual insurance companies. EU law prevents governments from intervening in relation to premium levels or the risks that insurers are prepared to underwrite. The new independent financial services authority will have a major role to play in increasing the confidence consumers have when dealing with financial undertakings. IFSRA will have effective mechanisms to balance the concerns of consumers with the requirements of effective solvency supervision. The Bill which establishes IFSRA is on Committee Stage and is scheduled to have completed all Stages by the end of the year. It is planned to have IFSRA in business early in 2003.

I have taken note of the other points made by Deputies. We have a significant societal problem. The Government is committed to taking action under a number of headings to address it, including continuing to improve our safety legislation, greater implementation of existing legislation, reforms in the legal system and reforms in the interaction between the customer of insurance undertakings and the undertakings themselves. These measures will have an impact on insurance claims and awards. We will look to the insurance undertakings to respond through a reduction of premium levels.

The Minister of State, Deputy Treacy, reactivated the MIAB when he returned to office. The board's report has been referred to the Equality Authority. For the first time the MIAB has used raw data from the insurance companies. That data was not available prior to its investigation—

Four and a half years.

Yes, it took that long to get the information. It was impossible to get it in previous years. That information is finally being secured, documented and made public.

I wish to share my time with Deputy Enright and Deputy Hogan.

Is that agreed? Agreed.

I congratulate Deputy Hogan for bringing forward this important motion. Members who campaigned during the election got a wake up call about insurance and how concerned people are about it. The general public, especially business and young people, are concerned about the increases in insurance costs. Members who are involved in local government are aware of the level of claims and the insurance costs for local government, which impinges on the provision of local services.

It is often suggested that 20% of claims are spurious. I believe that is an underestimation. People no longer take responsibility for their safety. They no longer accept blame when they have an accident or are irresponsible. Their first response is to consider making a claim. They try to place blame elsewhere. We should try to return to a system where people accept responsibility for their actions.

Ireland is one of the most litigious countries in Europe. The compensation culture is like a cancer eating into society. At this stage it borders on the immoral. The State and the Government must move quickly to halt the slippery slide towards a situation where all commercial services and industry will grind to a halt. We are less competitive in industry and commerce than our partners in Europe because of the level of compensation and the consequential increase in the cost of premia. IBEC has calculated that if Ireland had the same level of insurance payments in the area of employers' liability as in other countries, over a four year period 10,000 jobs would be created due to the improved level of efficiency. We are uncompetitive in many areas, especially manufacturing, where we are in competition with our European partners because of the level of claims made against employers.

Young people cannot obtain motor insurance. Why must their insurance premia be so high? They are many times higher than in the UK or elsewhere in the EU because compensation payments are far higher. There is a practice whereby insurance companies reach agreement on settlements at the steps of the court. They do so because claimants will settle for less rather than appear in court, and it has been proven statistically that this is so. However, it creates a situation where people who make spurious claims do not even have to take the stand to give their side of the story. Agreement is reached at the door of the courthouse and they go away laughing. The system acts against the best interests of genuine claimants who may have to wait many years for a resolution of their claims, with consequential distress arising from uncertainty over the level of compensation. This discourages rehabilitation and a return to work. If someone has a claim against his or her employer, he or she is advised to delay returning to work until the claim has been settled. The courts are clogged with such claims and claimants who are fit to work are advised not to do so, which is not in the interests of the claimant, the employer, industry or the State.

Insurance costs are creating complications for employers, businesses, motorists, public authorities and voluntary and sporting organisations. For example, school teachers can no longer send anyone out on an errand and playgrounds are also in difficulties due to rising insurance costs. The sooner the Government takes action on this matter the better.

The issue of insurance costs was a major problem for the last Government and it remains so today. I wonder if the Government intends to deal with this matter which affects every sector of society? A small factory in my constituency, employing a staff of 22, contacted me recently because its insurance premium rose by 230%. The company was not notified of the increase until two weeks after the policy's renewal date and, thus, had no opportunity to seek alternative quotations for cover. The factory was faced with a stark choice and the insurance company stated, "Why don't you let two people go in order to pay for your insurance this year?" That would have meant that two employees would lose their jobs to maintain corporate insurance cover.

This year, the average business has been hit by insurance premium increases in the region of 60%. I am aware of the case of another company with seven employees. From 1999 to 2001 its insurance costs doubled, so we cannot say that this situation has come about suddenly as a result of the events of 11 September 2001. Insurance costs have been rising since long before then. This year, however, the company's premium rose by 150%.

Another sector that has been particularly badly hit by this problem are the self-employed, including painters and decorators, and builders. I know of one painter who has been in business for 18 years and never made an insurance claim. Yet, he was refused a renewal of his public liability insurance this year and, as a result, has lost a significant State contract. The man has effectively gone out of business. He has returned to painting private houses on his own and is no longer able to employ people, as before.

This situation has a knock-on effect because home owners cannot risk engaging someone to undertake painting, decorating or building work if they do not have public liability cover for accidents. The owners of premises risk having their existing insurance nullified if they allow someone who is uninsured to work there. If people cannot engage builders and others to work on their houses, there will be an overall slowdown in this area of endeavour.

My generation had been hit hard by the rise in motor insurance costs, which have risen by 40% to 50%. Last year, one young man had to pay £4,017 to insure his Nissan Micra car. He needed the vehicle to travel 20 miles to work because he lives in an area which is not served by public transport. Essentially, he was working to pay for his motor insurance, not to mention his car.

Local authorities have also had to face the problem of insuring children's playgrounds and, as a result, in my county there are no such playgrounds. Even if funding was available from the Department of the Environment and Local Government, which there is not, councils could still not provide playgrounds due to the prohibitive insurance costs. As we have heard, some major tourist attractions are in danger of closing down. They include Birr Castle Demesne, in my constituency, and Westport House in County Mayo. Both businesses faced serious problems this year and when they eventually obtained insurance cover they had to pay massive increases. This makes the operation of such tourist enterprises extremely difficult. They will have to examine their figures to see whether they can survive next year in light of spiralling insurance costs.

While premiums are increasing significantly, there is a reduction in what insurance companies are prepared to cover. The Government must examine the reasons for this phenomenon. Every year people are complaining that less and less is being included in the items covered by insurance policies.

Insurance companies should be compelled to notify people of premium renewals and the precise costs involved, well in advance of the renewal date, which is not the case at present.

I thank Members who have contributed to this debate and I am grateful for the support of the Labour Party, the Technical Group and the Independent Deputies who have endorsed the Fine Gael motion. It is strange that, in one way or other, most of those on the Government side also supported our motion. They realise the importance of this issue and the difficulties it is causing for businesses, young people and communities generally. The Minister should agree to this motion because there is very little that separates us on the issue. We should proceed in a united way in the Oireachtas to deal with this urgent matter that is affecting the lives of most people.

Yesterday, I set out a number of details concerning the massive increases in insurance that have occurred across the board, from motor vehicle cover to employers' liability and community groups' insurance. The case has been made cogently and the details were tabulated last April in the report of the Motor Insurance Advisory Board, which was three and a half years in gestation. Notwithstanding the difficulties in obtaining much of the information in the report, we have seen no action since then. There has been, however, a desperate attempt to introduce a 15-day notice rule for the renewal of premia, which had to be renegotiated during August. Much more concerted and co-ordinated action is required by the Government to implement this plan. The insurance issue is urgent and must be treated seriously by the Government.

I was disappointed by the response of the Minister yesterday that she has had to establish yet another study of competition issues. We have received many representations and complaints from interested parties over the years and we have had long enough to react to this problem. When insurance companies were merging we had opportunities to foresee that these developments would have an effect on insurance premiums and that competition issues would arise. Regrettably, however, the Minister and her Department have not seen fit to carry out a detailed study on the competition implications of these decisions at the same time as the Motor Insurance Advisory Board was preparing its report.

If only four or five insurance companies are dealing with the motor vehicle market, there will be a temptation for such firms to come together unofficially to have the same premia structure. That happens in other walks of life, including the meat industry about which we often hear complaints. It is difficult to prove such things but, nevertheless, when there is only a small number of players in the market there will be a private monopoly.

That is correct.

That is not in the public interest. As long as the Minister prevaricates on this issue through consultation and establishing studies, Fine Gael will campaign for action on the implementation of the relevant recommendations in the MIAB's report.

I am worried about another aspect of the Minister's speech. She stated that even though she was in favour of the establishment of a personal injuries advisory board, this would have to be done in co-ordination with court reform. I have been a Member of the House long enough to realise that reform of the courts is a difficult issue, involving the Judiciary, the Bar Council and the Incorporated Law Society. Such reform will not occur rapidly.

Therefore, I would be interested to know how the Minister for Enterprise, Trade and Employment will move forward this important development – the setting up of this PIAB – at the same time as court reform, and how long it will take. I would be disappointed if the Minister was engaging in a two-hand reel with her colleague, the Minister for Justice, Equality and Law Reform, Deputy McDowell, and slowing down the process in the interests of certain professions which, ultimately, would be against the interests of the consumer.

I am delighted that the Minister of State, Deputy Treacy, has arrived in the House. He knows that everything I said about the difficulties which have emerged over the past number of years in dealing with this issue is true, but, unfortunately, he did nothing about it.

That is not true.

Just before the election the then Minister of State for Enterprise, Trade and Employment, Deputy Treacy, certainly got to the stage where he published an excellent report by the board under the chairmanship of Ms Dorothea Dowling. Unfortunately, he did not give himself a chance to implement the report. I am disappointed that, with all the knowledge he built up over four and a half years of gestation, all we got at the end of the day was a report and no action.

For the sake of business, young people, community groups and all those who are writing to Deputies on all sides of the House about this issue, let us get action rather than words, let us get implementation rather than another study. Accordingly, the House should not divide on this issue. All of us should be united in ensuring that there is a cost structure in the insurance industry which will lead to reduced premiums and which will also allow people, who are going without insurance at present, to get it at reasonable rates.

Deputy Hogan will be supporting the amendment so.

Amendment put.

Ahern, Michael.Ahern, Noel.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Brennan, Seamus.Browne, John.Callanan, Joe.Callely, Ivor.Carey, Pat.Carty, John.Cassidy, Donie.Cooper-Flynn, Beverley.Coughlan, Mary.Cowen, Brian.Cregan, John.Curran, John.Davern, Noel.Dempsey, Tony.Dennehy, John.Devins, Jimmy.Ellis, John.Finneran, Michael.Fitzpatrick, Dermot.Fleming, Seán.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.

Kelly, Peter.Killeen, Tony.Kirk, Seamus.Kitt, Tom.Lenihan, Conor.McCreevy, Charlie.McDowell, Michael.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donnell, Liz.O'Donovan, Denis.O'Flynn, Noel.O'Malley, Fiona.O'Malley, Tim.Parlon, Tom.Power, Peter.Power, Seán.Sexton, Mae.Smith, Brendan.Smith, Michael.Treacy, Noel.Wallace, Dan.Wallace, Mary.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G. V.

Níl

Boyle, Dan.Breen, Pat.Broughan, Thomas P.Burton, Joan.Connaughton, Paul.Costello, Joe.Coveney, Simon.Cowley, Jerry.Crawford, Seymour.Durkan, Bernard J.English, Damien.Enright, Olwyn.Ferris, Martin.Gogarty, Paul.Gregory, Tony.Harkin, Marian.Hayes, Tom.Healy, Seamus.Hogan, Phil.Lynch, Kathleen.McCormack, Padraic.McGrath, Finian.

McGrath, Paul.McManus, Liz.Mitchell, Olivia.Morgan, Arthur.Murphy, Gerard.Naughten, Denis.Neville, Dan.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Penrose, Willie.Perry, John.Ring, Michael.Ryan, Seán.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.

Tellers: Tá, Deputies Hanafin and S. Power; Níl, Deputies Durkan and Stagg.
Amendment declared carried.
Question, "That the motion, as amended, be agreed to", put and declared carried.
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