That leave be granted to introduce a Bill entitled an Act to provide for amendments to the Judicial Council Act 2019, to provide for the making of regulations to require insurance providers to provide information to the Central Bank of Ireland relating to the effect of personal injuries guidelines and related matters.
A Cheann Comhairle, you will be aware that the personal injuries guidelines were adopted by the Judicial Council on 6 March and will take legal effect on 24 April. They will replace the book of quantum, which, until now, has been used by the courts and the Personal Injuries Assessment Board to determine the level of awards in personal injury cases. Since these guidelines were adopted and published, the insurance industry has moved quickly to row back on many of the commitments it made to reducing insurance premiums, and that cannot be allowed to happen. It should not be allowed to move the goalposts. The insurance industry called for these guidelines, the Oireachtas passed legislation to allow them to take effect and the Judiciary has done its job in reducing the awards in respect of the guidelines. Now, the insurance companies have to reduce substantially the cost of premiums for motorists, homeowners and business people.
The insurance industry, when it lobbied for these guidelines, told us that insurance costs would fall once they were adopted. They came before me and other members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, and the CEO of Zurich Insurance stated the following in the context of a hypothetical drop of 50% in claims for soft-tissue personal injury awards: "It would be quite reasonable that if that were to happen and insurers had reduced their prices, with all things being equal and somewhere in the region of 10% to 15%, the committee should ask us a lot of questions." He went on to state that for liability, we should expect prices to drop even more, a fall of 20%. The guidelines adopted by the Oireachtas and the Judicial Council go well beyond the 50% that the leaders of the insurance industry talked about before the committee, in some cases reducing the level of awards by more than 50%.
We should not let the industry off the hook and it should be held to account. We need a way to verify that the reductions in awards facilitated in personal injury cases by the Houses of Oireachtas are passed on, euro for euro, to consumers in order that policyholders see a reduction in their premiums as they take out insurance. Those savings must be passed on to customers in the form of lower prices - no excuses. We have heard of Ministers meeting representatives of the insurance industry, imploring them to reduce prices as a result of the new guidelines. This legislation will ensure that happens and provide transparency in this issue. We need a way of verifying that every euro in the lower awards has been passed on to consumers.
Section 1 will provide for the interpretation of where the principal Act refers to the Judicial Council Act, which the Bill amends.
Section 2 will amend the Judicial Council Act by adding a new section that provides for a report on the effect of the personal injury guidelines on the cost of insurance. It will provide the Department of Finance with the ability to make regulations that will require insurance companies to provide information to the Central Bank on how the new personal injury guidelines have impacted on policies for policyholders. In particular, section 2(4) will provide that the regulations may require insurance companies to provide the Central Bank with information about a number of matters, namely, the amount paid by insurers by way of personal injuries, the amount that would have been paid in personal injury awards if the personal injury had not come into effect, the amount charged by insurance companies by way of premiums for policies covering third-party personal injuries and the amount that insurance companies would have expected to charge by way of premiums if the guidelines had not come into effect. The information will be required for each of the four years following the personal injury guidelines having come into effect. Some Deputies may say this is onerous on the insurance industry, but this is the only way we will be able to verify whether the reduction in claims for personal injuries has resulted in a euro-for-euro reduction in the cost of premiums for motorists, businesses and homeowners, or whether the insurance industry has pocketed some of those reductions despite the commitments it gave.
The six largest insurance companies in Ireland are AXA, Aviva, Allianz, RSA, Zurich and FBD, and they are also the six largest insurance companies in Britain. When the British Government reduced the awards for whiplash injuries, it passed very similar legislation because it wanted to ensure that those same companies that operate here were not pocketing awards and that they were being passed on to consumers.
I commend the Bill to the House. It is a way to ensure that the intention of the personal injuries guidelines passed by this House and adopted by the Judiciary will result in reductions to consumers and not fatten the pockets of the insurance industry.