Written Answers. - Insurance Industry. – Dáil Éireann (29th Dáil) – Thursday, 23 Oct 2003

1. Implemented	23
2. Partially implemented and being further implemented	3
3. In progress	28
4. Cannot be further progressed at present	1
5. Under consideration	12

Recommendations relating to Department of Transport

No.	Issues Addressed	Recommendation	Status
1	Further road safety improvements.	That priority be assigned to achieving the objectives set in the Governments Strategy for Road Safety for a wide range of reasons, which extend far beyond the cost of insurance.	2
2	Provisional Licences.Road Safety Driver Education in schools.	That the current system of unsupervised driving by provisional licence holders be reviewed and consideration be given to the introduction of a road safety and driver education syllabus in schools.	3

No.	Issues Addressed	Recommendation	Status
34	Insuring the Vehicle rather than the use of the Vehicle.Study needed to see if this would reduce premiums.	That detailed consideration be given to amending the Road Traffic Acts to require insurance on the vehicle, as in mainland Europe, rather than allowing claims to be declined on the basis of the drivers use but with appropriate measures to address the rights of insurers where premiums have been underpaid.	4
35	Fourth EU directive on Harmonisation.Irish citizens right to sue the insurer direct.	That, when the Fourth EU Directive on Harmonisation of Motor Insurance is incorporated into national law in 2003, Irish citizens are extended rights equal to those of visiting EU citizens to sue the vehicle insurer direct for compensation entitlements arising from motor accidents occurring in Ireland.	3
36	Motor Insurance Bureau of Ireland agreement to be amended, to ensure victims of uninsured/defectively insured vehicles get equally favourable treatment.	That the agreement between the Motor Insurers Bureau of Ireland and the Minister for the Environment & Local Government be amended to clearly ensure that victims of uninsured or defectively insured vehicles can pursue their claims on no less favourable terms than apply to insured cases as consistent with the jurisprudence of the European Court of Justice lest they be doubly disadvantaged by involvement in such occurrences.	3
37	Road Traffic Act to be amended, in line with EU Directives on harmonisation, to protect victims of defectively insured vehicles.Better clarification on insurance certs.	That the Road Traffic Acts, and other relevant legislation, be amended to fully adopt the Articles of the various EU Directives on harmonisation of compulsory motor insurance so as to clearly uphold the rights of victims under European law in accidents involving uninsured, untraced, defectively uninsured or allegedly defectively insured vehicles or drivers and that the prescribed content of insurance certificates be reviewed for clarity of communication with the addition of wording highlighting that the rights of Third Parties are not affected by cover limitations in the policy document.	5
61	Access of insurers to National Driver File, after introduction of penalty points.	That following introduction of the penalty points system, and subject to the provisions of data protection legislation, insurers be permitted access to relevant information on the national driver file under provisions similar to Section 28 of the Road Traffic Act, 1994.	3

Recommendations relating to Department of Transport & Department of Justice, Equality and Law Reform

No.	Issues Addressed	Recommendation	Status
3	Higher Fines.Detaining vehicles.Earmarking of fines for Motor Insurance Bureau of Ireland.	That the sanctions for flagrant breach of compulsory insurance obligations should be fines at a level more consistent with premium charges and should provide for vehicle confiscation, as applies to non-payment of road tax, with proceeds being assigned to the Motor Insurers Bureau of Ireland who are responsible for claims from victims of uninsured accidents.	2

Recommendations relating to Department of Justice, Equality and Law Reform

No.	Issues Addressed	Recommendation	Status
38	Constitutional balance between rights of defendants and genuine injured parties.	That Court procedures for personal injury litigation be radically reviewed in the interests of both genuine injured parties and premium paying policyholders, the majority of whom have not been involved in any culpable motor accident.	3
40	Improved access to justice.Independent mechanism for assessing disputes on legal costs.Transparency.Promotion of competition.	That the current Court based system for assessing legal fees be reviewed as to its cost effectiveness in satisfactorily resolving disputes on litigation costs and that consideration be given to a framework which the public might regard as more independent of the legal establishment and from which more transparent information might be available to litigants on the allowable levels of fees.	5
42	Abuse of legal loophole.Cost of legal fees.	That the legislation on accrual of 8% interest on legal costs from date of trial should be revised in a manner consistent with the Prompt Payments of Accounts Act 1997 with a significantly reduced rate of interest and a reasonable period allowed from the date of bill presentation for payment or the resolution of legitimate queries.	3

No.	Issues Addressed	Recommendation	Status
46	Public interest.Constitutional balance.Macro-economic consequences.	That consideration be given to the concept of “amicus curiae” for representations from the Office of the Attorney General and/or IFSRA if an issue before the Courts has radical implications for the cost of insurance with consequent effects on the Irish economy particularly where the effect is retrospective.	3
47	Public policy.Claims costs reduction.Consumer protection.	That stringent measures be introduced to tackle fraudulent and exaggerated claims with loss of all compensation entitlements and appropriate criminal sanctions.	3
48	Public policy.Promotion of enhanced quality of justice.Claims costs reduction.	That all claims which include allegations of earnings losses be supported by proof of declared earnings history from the Revenue Commissioners and records of benefits sought under social insurance with any earnings from “the black economy” to be excluded from claim assessments or negotiations.	3
49	Restoration of constitutional balance when wrongly sued people have been vindicated.	That awards on costs to defendants are made automatic upon successful defences either on liability or on the extent of loss, to restore equity between litigants while acknowledging that methods of payment enforcement will always be a matter for judicial discretion under Examination Orders.	3
50	Enhancement of justice and protection for victims.Avoidance of need for victims to rely on the state.	That the system of lump sum compensation payments be reviewed on the basis that the long-term needs of the seriously injured may be better served by guaranteed annual payments.	5
51	Improved compensation delivery for victims.	That a system be introduced to facilitate pre-trial interim payments to the seriously injured in cases where liability is not a substantial issue but there is a financial need to replace lost earnings or seek medical treatment.	5
52	Promotion of enhanced quality of justice.	That a system be introduced to facilitate the award of provisional damages where there is a substantial risk that the injured partys medical condition may deteriorate in the future.	5
54	Promotion of enhanced quality of justice.Better consistency between judgments.Speedier disposal of non-complex cases.Reduction in legal costs.	A system of case management be adopted by the Courts, with a panel of judges specialising in injury claims, to secure early hearings of non-complex cases which could be disposed of by a short trial and that the Small Claims Court system be extended to deal with property claims up to £5,000 arising from motor accidents.	5
55	Promotion of enhanced quality of justice.Facilitation of earlier settlement.Reduction in legal costs.	That claimants be obliged to state their minimum settlement terms in litigation, supplementary to the current procedure which permits a defendant to tender their maximum offer whereby they secure protection from liability for further litigation costs.	3
56	Promotion of enhanced quality of justice.Better consistency between judgments.Reduction in legal costs.Transparency.	That information on Irish compensation levels for various injuries be collated, such as a book of quantum or guidelines as produced by the Judicial Studies Board in England, and that this data be published to assist earlier settlements between defendants and plaintiffs.	3
57	Prevention of further increases in claims costs and in legal fees.	That the Court Bill 2001, entering the second stage in the Dáil, be amended so as NOT to increase current financial limits of the Courts beyond expressing the existing figures in convenient Euro amounts.	1

Recommendations relating to Department of Justice, Equality and Law Reform & the Incorporated Law Society of Ireland

No.	Issues Addressed	Recommendation	Status
43	Consumer protection.Legal costs.Promotion of competition among the legal profession.	That the draft 1998 legislation on advertising by Solicitors be progressed, with the additional requirement that all advertisements quote a revised rule by the Law Society summarising Section 68 of the Solicitors (Amendment) Act 1994 which prevents a percentage being deducted by lawyers from the compensation awarded to claimants. If an entitlement to advertise for personal injury claims is secured under competition law, that sufficient information be displayed to enable consumers to make price comparisons between professionals.	1

No.	Issues Addressed	Recommendation	Status
44	Consumer protection.Linked to Recommendation No. 43 concerning advertising by solicitors.	That, aside from legislation, the Incorporated Law Society of Ireland as a service to the public should require all advertisements by their members to state that a lawyer is not permitted to seek a percentage of a claimants compensation and that such action is regarded as misconduct under Section 68 of the Solicitors (Amendment) Act 1994.	1

Recommendations relating to Department of Enterprise, Trade & Employment

No.	Issues Addressed	Recommendation	Status
13	Promotion of competition.Consumer protection.	That a regulation be introduced requiring a minimum period of notice, of not less than 15 working days, to policyholders of the terms upon which renewal is offered to allow sufficient time for consumers to “shop around”.	1
14	Linked to Recommendation No. 13.	That a regulation be introduced to prescribe the issuing of “No Claims Bonus” documents with renewal notices to enable clients to market their business elsewhere for comparative quotes.	1
39	Promotion of enhanced quality of justice.Cost-effective, speedy redress.Claims costs reduction.	That an alternative to adversarial litigation be made available to parties where liability for a motor accident is not disputed but independent assessment of compensation is required. The MIAB endorses the model of the Personal Injuries Assessment Board proposed for employers liability claims which might be extended to motor claims at an early opportunity.	2
62	Promotion of coherent and cohesive policy formulation and implementation.	That a forum be established drawn from the various Government Agencies whose actions affect the cost of compulsory motor insurance so that the full financial consequences of proposed legislation or administrative action are understood and factored into decisions.	1
64	Promotion of competition.	That, in the context of the Competition Bill 2001, consideration be given to incorporating the principle of “acting against the public interest”.	1

Recommendations relating to IFSRA from 1st May 2003, formerly relating to Department of Enterprise, Trade & Employment

No.	Issues Addressed	Recommendation	Status
29	Transparency.Public Information.Informing Policy.	That the format and content, as published in the “Blue Book”, of insurers annual Statutory Returns be amended to show clearly the accrual for the current accident year separately from movements in prior years' reserves.	3
30	Linked to Recommendation No. 29.	That all relevant information in Statutory Returns be shown separately for private car, commercial motor, motorcycles and other main classes of motor business by coverage types.	3
31	Linked to Recommendation No. 29.	That the format and content of Statutory Returns be reviewed in line with practice elsewhere in Europe to improve the quality and quantity of public information.	3
32	Transparency.Enhanced prudential supervision.Comparison of data between insurance companies.Informing policy.	That the new insurance regulator issue revised guidelines to insurers to ensure more consistent completion of existing Statutory Returns in a manner which facilitates consistent comparisons and eliminates the current variations in practice between companies.	3
33	Transparency.Provision of clear record of the cost of uninsured driving.Public information.Informing policy.	That the preparation and publication of Statutory Returns be amended to clearly reflect the cost of uninsured driving recording numbers of cases, amounts of payments and provisions for outstanding claims with other relevant information as deemed appropriate.	3
59	Achievement of the Single Market.Balance between supervision and consumer interests.	That a Motor Policyholders Protection Fund be established to pay claimants in the event of the insolvency of an insurer regulated in Ireland.	5

No.	Issues Addressed	Recommendation	Status
60	Linked to Recommendation No. 59.	That a Policyholders Protection Fund be allocated an opening balance, estimated at £19m, from the motor insurance levy collected up to 1993 from which sufficient allocation has been made to satisfy administration of the liabilities of the old PMPA.	5

Recommendation relating to Department of Finance

No.	Issues Addressed	Recommendation	Status
58	Level of premium charges.Adequate funding for enforcement issues.	That the stamp duty (formerly levy) on motor insurance, if not abolished as repeatedly recommended by the Board, should be ring fenced for related matters which include road safety initiatives, such as funding of the National Safety Council and the maintenance of a Policyholders Protection Fund to safeguard claimants interests in the event of an insolvency of an insurer regulated in Ireland.	5

Recommendations relating to Department of Finance in relation to IFSRA Legislation

No.	Issues Addressed	Recommendation	Status
4	Balance between prudential supervision and consumer protection.	That the unique position of compulsory motor insurance should be adequately reflected in the responsibilities of the new Irish Financial Services Regulatory Authority (IFSRA) as the Board are of the view that there is currently no effective regulatory mechanism to balance the legitimate concerns of consumers with requirements for effective solvency supervision.	1
27	Enforcement/redress.Consumer satisfaction.Level of premium charges.	That a Statutory Office of Insurance Ombudsman be established with an extended brief including issues of quotation refusals and denials of policy indemnity for compulsory cover (IIF dissent) and allowing provision for moderate compensation to successful complainants.	3

Recommendations relating to IFSRA

No.	Issues Addressed	Recommendation	Status
5	Transparency.Accountability.Consumer protection.Gathering a consistent set of data over an adequate period of time to assess equitable charging.	That central gathering of statistics on motor insurance premium and claims costs by driver profile be formalised by IFSRA, including monitoring by the new insurance regulator of data quality, to ensure that reliable information is available to inform public policy in future years and to improve market intelligence as provided for in EU Regulation No. 3932/92.	3
6	Discriminatory action.Linked to Recommendation No. 5.	That IFSRA supply regular marketwide statistics on motor premium differentials to the Equality Authority to assist in assessing insurers compliance with the Equal Status Act 2000 and subsequently its proposed extension.	3
7	Public information.Promotion of competition.	That IFSRA publish regular surveys of motor insurance quotations to engender price competition and to educate the public on premium variances within the market and that IFSRA liaise with the Central Statistics Office on assessment of motor insurance inflation.	3
8	Public information.Promotion of competition.e-Government.	That IFSRA pursue the concept of a “one stop website” to provide consumers with across market information on the motor premiums available for specific risks – the placing of an obligation on insurers to notify their rates does not appear to offend EU law on freedom of services.	3
21	Transparency.Independent monitoring of insurance industry behaviour.	That the Declined Cases Committee, currently consisting solely of insurer representatives, should include external representatives to report to IFSRA on the operation of the scheme.	1
22	Independent standard-setting for insurance industry behaviour.Consumer protection.	That IFSRA agree standards of business practice with insurers governing dealings with private consumers and small businesses.	3

No.	Issues Addressed	Recommendation	Status
23	Consumer protection.Level of premium charges.	That IFSRA set rules for insurers to implement in concrete terms the duty of utmost good faith as it applies to insurers, as a corollary to the consumers duty of utmost good faith, to redress the imbalance in bargaining power between insured and insurer. The objectives of these rules should include ensuring that direct clients do not pay for unnecessary or inappropriate cover offered by insurers and to require an appropriate duty of consultation with policyholders before liability payments are made on their behalf.	3
24	Consumer protection.Enforcement of Insurance Act 2000.	That regulation by IFSRA of insurance intermediaries should encompass the principle of “good faith dealing” to achieve the objectives as set out in Recommendation No. 23 (on rules-setting for insurers).	1
25	Public information.Level of insurance costs.Law enforcement.	That IFSRA issue clarification of the Consumer Credit Act 1995, or if necessary introduce alternate legislation, to control premium instalment plans.	5
63	Public information.Consumer protection.	That IFSRA should be pro-active in responding to media statements by insurers on trends in premium charges and related matters.	3
66	Promotion of:Consumer protectionCompetitionSocial inclusion.	That the proposed Consumer Director in IFSRA would have a duty to highlight at EU level the unacceptable consequences for [segments of] the Irish market of further mergers in the interests of social inclusion, given our island location at the far west of the EU with a small, although rapidly growing, market which may be unattractive to many players.	1

Recommendation relating to Department of Health and Children

No.	Issues Addressed	Recommendation	Status
45	Claims costs reduction.Equal status as regards Irish and other EU nationals.	That the Health (Amendment) Act 1986 be reviewed to the extent that it represents a discriminatory charge levied only on those involved in motor accidents at multiples of the rate charged to providers of health insurance and inconsistent with rates charged to visiting EU nationals in a manner that may offend the Equal Status Act 2000 given that victims of motor accidents represent less than 1% of users of hospital services.	5

Recommendations relating to the Irish Insurance Federation

No.	Issues Addressed	Recommendation	Status
9	Discriminatory action.Accountability.Transparency.Consumer protection.Promotion of competition.	That a regulation be introduced to require insurers who refuse to quote for any particular risk to state their reasons in writing upon request, acknowledging the fact that insurers cannot be required under EU law to provide cover for any particular risk but equally subject to the anti-discrimination provisions of the Equal Status Act 2000.	1
10	Enforcement of Equal Status Act.Promotion of competition.	That insurers undertake to comply with the provisions of the Equal Status Act 2000 in respect of drivers aged 65 and over including advising them of their rights to freedom of contract and to improve procedures for retirees who have a record on employers fleet policies but are now seeking private motor insurance.	1
11	Public policy.Discriminatory action.	That insurers undertake to desist from applying policy terms, limitations or loadings that may be encountered by policyholders with disability issues relating to drivers or passengers unless there is evidence of additional risk.	1
12	Achievement of the Single Market.Discriminatory action.	That insurers operating in Ireland undertake to recognise EU driving experience and “No Claims Bonus” certification presented by other European citizens.	1
15	Transparency (cost unbundling)Promotion of competition.Consumer protection.	That a regulation be introduced to standardise renewal notices – detailing the calculation of premium from compulsory cover to the full coverage offered with elective elements clearly indicated and showing any loadings or discounts applied in both monetary and percentage terms.	3

No.	Issues Addressed	Recommendation	Status
16	Transparency.Consumer protection.Promotion of competition.	That a regulation be introduced to tackle potential “confusion of illusion of choice” by requiring insurers who offer motor quotations under a number of business names and product images or through any direct outlets to state the identity of the insurance group of which they are part and that equally brokers should be obliged to provide each client with a list of the motor insurers for which they hold an appointment consistent with the provisions of the Investment Intermediaries Act 1995.	1
17	Age-related discriminatory action.Promotion of competition.	That insurers adopt rating practices that allow sufficient credit for accident free driving experience rather than filtering out risks solely on the basis of age.	1
18	Promotion of competition.	That insurers desist from any practice of requiring collateral business to be placed with the company before a motor quotation is supplied and that this practice be reviewed by the Competition Authority should it persist.	1
19	Transparency.Consumer information.Promotion of Competition.	That the existing Declined Cases Agreement between the Minister and insurers operating in Ireland, under which a quotation cannot be refused on the grounds of age alone, should be formalised by legislation.	5
20	Linked to Recommendation No. 19.	That the number of refusals required under the existing Declined Cases Agreement be reduced from 5 to 3 in light of the market consolidation resulting from mergers.	1
28	Promotion of competition.	That IIF agree a code of conduct with its member companies on anti-competitive behaviour subject to any more formalised measures, which may ultimately be required by IFSRA under competition law.	1
53	Prioritisation of genuine victims.	That insurers pursue a policy of seeking to assist in the rehabilitation of injured parties where such action is appropriate.	1(Subject also to development of legal and medical infrastructure.)

Recommendation relating to the Irish Insurance Federation & IBEC

No.	Issues Addressed	Recommendation	Status
26	Unwarranted nuisance value settlements.Claims costs reduction.Constitutional balance.	That IIF agree with IBEC and other business associations on a set of guidelines for the handling of Third Party claims incorporating appropriate referral to commercial policyholders before compensation payments are made on their behalf.	1

Recommendations relating to the Competition Authority

No.	Issues Addressed	Recommendation	Status
41	Promotion of competition.Consumer protection.	That the Competition Authoritys investigations of the professions should assign priority to the fees which impact on the cost of motor insurance given its compulsory nature and the recent high inflation rate recorded for insurance and that, on completion of those investigations, their findings be taken into account in a review of the effectiveness of self-regulation by the legal profession.	3
65	Promotion of competition.	That the Competition Authority would have a duty to review all further insurance mergers in the interests of the Irish economy with appropriate reference to IFSRA and that the process of consultation seek to protect the interests of specific policyholder groups since the effects of mergers may warrant consideration below issues of the market as a whole.	1
67	Promotion of competition.	That when the Competition Authority assumes the new roles proposed under the Competition Bill 2001 it should review the area of compulsory motor insurance.	3

Dáil Éireann debate -
Thursday, 23 Oct 2003

Written Answers. - Insurance Industry.

Tom Hayes

Tom Hayes

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

Dáil Éireann debate - Thursday, 23 Oct 2003

Written Answers. - Insurance Industry.

Tom Hayes

Tom Hayes

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

Dáil Éireann debate -
Thursday, 23 Oct 2003