Written Answers. - Insurance Cover.
Thomas P. Broughan
Question:
163
Mr. Broughan
asked the
Minister for Education and Science
if his attention has been drawn to the fact that some insurers have warned schools that they may be forced to withdraw cover due to seriously inadequate conditions; if his attention has been further drawn to the case of one school (details supplied) where the annual premium is now ?80,000, more than half its annual grant for running costs; his proposals to provide additional funding for schools facing such insurance problems; and if he will make a statement on the matter.
[15736/03]
Minister for Education and Science (Mr. Dempsey)
Responsibility for arranging insurance cover on school property and against public liability is a matter for the managerial authorities of primary and voluntary secondary schools, which are privately owned. Many reasons have been put forward by management authorities for the current insurance increases, ranging from school factors such as claims history, location, curricula offered, size of school and factors affecting the international insurance market. Per capita grants towards the operating costs of primary and voluntary secondary schools may be used for this purpose. Such grants have increased significantly in recent years.
In the case of secondary schools, the standard per capita grant of €224.74 that applied in 1997, has been increased to €266.49 in this school year. For disadvantaged schools the increase has brought the per capita grant to over €300. In addition, secondary schools have benefited under the school services support initiative, since its inception some two years ago. This annual grant was increased by €10 per pupil from January last. This latest increase has brought the support services grant in the case of secondary schools to €127 per pupil from 1 January 2003.
This increase is in addition to the range of equalisation grants of up to €15,554 per school, €44.44 per pupil per annum that was also approved for secondary schools in the past two years. Schools are afforded considerable flexibility in the use of these resources to cater for the needs of their pupils. In my view this is, in gen eral, a preferable approach to putting in place grants for specific initiatives. For example, in a school with 500 pupils, this amounts to extra funding of up to €100,000 per annum and annual grants of €236,761, –€255,811 in the case of disadvantaged schools – towards general expenses and support services, including insurance costs. The school referred to by the Deputy has a current enrolment of 619 pupils and has disadvantaged status.
In the case of the school referred to by the Deputy, my Department recently provided capital grant aid in the amount of €32,140.24 for security fencing in order to meet their insurance company's directive. No further applications have been received from the school in this regard. In recent years my Department has received applications from a number of voluntary secondary schools for works to be carried out in accordance with insurance company directives to ensure continued cover. In all cases the applications are dealt with as a priority or capital grant aid has been provided to allow the works be carried out.
Tackling the difficulties that are being caused by high insurance premiums is a clear priority for the Government and for the Tánaiste and Minister for Enterprise, Trade and Employment. A key concern to which the Tánaiste is giving priority is the cost and availability of liability insurance. Although the Tánaiste's Department is responsible for the supervision of insurance companies, EU law prevents Governments from intervening in relation to premium levels or the risks that insurers are prepared to underwrite. However, government's are free to take appropriate action, which could influence cost reduction by the industry. A comprehensive set of measures is contained in An Agreed Programme for Government, the underlying purpose of which is to bring about an improvement in the functioning of the insurance market and in the system. In this context, last October the Tánaiste announced a comprehensive programme for the fundamental reform of the Irish insurance market. Key initiatives in the reform programme include the establishment of the Personal Injuries Assessment Board and publication of the action plan for the implementation of the recommendations of the Motor Insurance Advisory Board. While the MIAB was essentially concerned with motor insurance, the recommendations also relate to other forms of insurance and to public and employer's liability in particular. The action plan reflects this. An Agreed Programme for Government also contains a commitment to remove unwarranted constraints on competition in all sectors of the economy.
As part of this commitment, and complementary to the reform programme, the Tánaiste's Department, in conjunction with the Competition Authority, is undertaking a study of competition in the insurance marketplace, with particular reference to motor, employers' liability and public liability insurance. Work on the study is in progress. It is envisaged that the bulk of the work will be completed this year and that a report will be produced in the early part of 2004.
The Government considers that these measures, taken as a package, constitute a programme that is capable of delivering very real reform and that reductions in insurance costs will translate into significant reductions in premiums.
Question No. 164 answered with Question No. 157.
Question No. 165 answered with Question No. 127.
