I move: "That the Bill be now read a Second Time."
I am sharing time with Deputies Conway-Walsh, Tully, Ó Laoghaire, Mitchell and Stanley. I am glad that I can introduce the Bill on Second Stage to the House. For far too long, Deputies will have heard me talk about how consumers have been ripped off by the insurance industry, which has put its customers at the bottom of the list in terms of priorities. Insurance is an essential part of a functioning economy. In many instances, it is a legal requirement. While consumers have no choice but to pay for insurance, the industry has a choice as to how it treats its consumers. For far too long, it has treated its consumers badly. That is the reality.
An investigation by the Competition and Consumer Protection Commission, CCPC, has found that some of the biggest players in the industry, AIG, Allianz, Axa, Aviva and FBD engaged in price-fixing cartel-like activity and behaviour for a 21-month period between 2015 and 2016. In doing so, they reduced competition and increased prices for their customers. Last December, the Central Bank confirmed that the industry was engaged in dual pricing, a price gouging activity that targets loyal and vulnerable customers and then hits them with artificially high premiums whenever they renew. Sinn Féin has drafted legislation that would ban this practice as the Financial Conduct Authority, FCA, in Britain has done. I ask the Government to end the delay it placed on that legislation so that the Dáil can end this discriminatory practice at the earliest opportunity.
When it comes to prices, the average motor insurance premium has risen by 35% over the past decade, despite the cost of claims reducing over the same period by 9%. Despite all of this, the insurance industry has received a listening ear in government to air its grievances and has regurgitated many of them which were false. This Dáil has responded to one such grievance and delivered for it. The Judicial Council Act was passed by the Dáil in 2019 and, ultimately, led to the personal injuries guidelines that came it into effect on 24 April this year. These new guidelines reduce the level of damages for personal injury awards from between 38% and 69%, but the average being 50% across the board, cutting the cost of claims for the insurance industry and guaranteeing it significant savings as a result. As the Ceann Comhairle and others will know, Sinn Féin supported these guidelines for one reason, that is, that they would reduce the cost of claims and, in doing so, reduce the cost of insurance for customers.
The insurance industry made a promise to pass on these savings to its customers in the form of reduced premiums. We were even told how much we could expect premiums to reduce. In 2019, the CEO of Zurich insurance told the finance committee the following with regard to a 50% drop in awards for soft tissue personal injuries: "It would be quite reasonable that if that were to happen and insurers had not reduced their prices, with all things being equal, by somewhere in the region of 10% to 15%, the committee should be asking a lot of questions." In regard to business insurance, he said that we should expect prices to fall by 20%. They are the figures of the CEO of Zurich. Maybe we should expect more. It was straight from the horse's mouth that these guidelines provided for these types of reductions. What we need now is an immediate and significant reduction in insurance premiums paid by customers, including motorists, businesses and homeowners. That is clearly not happening.
In a survey conducted by my party, we received more than 1,300 responses. Of those who had received a renewal quote since the new guidelines came into effect, 58% saw their premium increase despite having made no claims in the previous 12 months and only 22% saw a reduction in their premiums.
With the new guidelines in place, every customer who has not made a claim should have seen his or her premium fall. However, the Government's strategy has been to cross its fingers and hope the industry will do the right thing by cutting premiums in response to the guidelines. I say we can do much better than that.
We need a measure that will provide oversight and hold the industry to account. That is precisely what this legislation does. It requires insurance companies to provide information to the Central Bank each year for the next four years, including the amount paid by the company in personal injury claims and the amount it would have paid in such claims had the personal injury guidelines not come into effect. In addition, companies would have to inform the Central Bank of the average premium charged under policies covering third-party personal injuries and the average premium that would have been charged had the guidelines not been implemented. The Central Bank would then be required to submit a report outlining this information to the Minister for Finance on an annual basis, with a copy laid before both Houses of the Oireachtas.
Those reports will show everyone how much the insurance industry has saved as a result of the implementation of the personal injury guidelines and, crucially, whether it has passed on all of those savings, euro for euro, to its customers. If it has not, we will know about it and so will its customers. Not only will this hold the industry to account, it will apply pressure on it to cut premiums immediately and significantly. After reforms reduced whiplash awards in Britain, similar regulations to those contained in this Bill were introduced there, coming into effect in March last year. Some of the largest players in the Irish market, including RSA Insurance, Aviva Insurance, AXA, Zurich, Allianz and AIG, are also the largest players in Britain and are subject in that jurisdiction to requirements akin to those set out in this legislation. We should not accept any less oversight for customers in this State. This legislation will provide that oversight and there is no legitimate reason for the Government or any Member to reject or oppose it unless he or she is doing the bidding of the industry.
The Minister of State knows that what is proposed in this legislation is right and he will not vote against it. However, the Government has indicated its intention to propose that the Bill not pass to the next stage, which is pre-legislative scrutiny, for nine months. Why under God would the Government do that? All we are trying to do is make the insurance companies live up to their promise to reduce premiums for customers and ensure the same oversight that applies when they sell a policy in Newry, Belfast or Derry applies when they sell a policy in this State. I ask the Minister of State to drop the Government amendment and let the Bill go to pre-legislative scrutiny. If he does, I will give a commitment to work with him and his Department to ensure the legislation is robust and fit for purpose and, if needed, that it is amended on Committee Stage after we have had proper legislative scrutiny.