Insurance Sector: Discussion

We move now to deal with item No. 9, which is the update on insurance matters. I welcome the Minister of State at the Department of Finance, Deputy D'Arcy, and his officials to the committee. I ask the Minister of State to make his opening statement.

I thank the joint Oireachtas committee for this invitation to discuss issues in the insurance sector. We are here to discuss an important and, at times, emotive issue for people and businesses across the country.

The system is creaking, or it is the Government that is creaking. I am not quite sure.

It could be the Opposition.

The Government is aware that the cost of insurance is having a serious impact on some businesses across Ireland and acknowledges that the premiums are very difficult to justify. Many individuals are experiencing premium increases.

As indicated in both the Oireachtas committee report on motor insurance and the working group's motor report, there is no legislative silver bullet to enable the Government to fix this problem immediately. There are considerable efforts being made to address many of the issues in the insurance sector and I will highlight some of them today. I look forward to hearing members' views and responding to the questions they may have.

By now, all members will be aware of the cost of insurance working group, which has been meeting since 2016. This group has published two reports – the first in January 2017, focusing on the cost of motor insurance, and the second, on the cost of employer and public liability insurance, published in January of this year. As part of the development of the two reports, the working group consulted a wide variety of stakeholders. In addition, the Department of Finance and I have met and engaged with many groups, including the Alliance for Insurance Reform, to whose representatives members spoke last Thursday. This ongoing consultation continues to inform the debate and the actions being taken.

The fifth quarterly update shows that of the 58 separate deadlines set across the two reports up to the end of quarter 1 of 2018, 48 have been met. Substantial work has been undertaken in respect of the ten incomplete action points, the nine action points that are classified as "ongoing", and the remaining action points with later deadlines.

These recommendations are wide in scope and aim to address issues such as the lack of transparency in the insurance sector, protecting the consumer, tackling fraud, improving the personal injuries claims environment and reducing costs in the claims process. The reports also emphasise how important it is for industry to play an active role in contributing to this process through greater transparency, more active engagement with policyholders in regard to claims and greater challenging of questionable claims etc. To date, 40 of the 71 action points in the motor report have been completed and eight of the 29 from the report on employer liability and public liability. The latter were concluded at the end of quarter 1 of this year.

I will now highlight a number of issues that have been the focus of much of the discussion recently and outline what is being done to address them.

I acknowledge that many people are dissatisfied with the personal injury claims system and have sympathy with the view that too many claims are being settled in such a way that we know little about the value of such settlements. Many take place on the court steps.

Both the motor and employer and public liability reports recognise this unhappiness with the system and there are a number of relevant recommendations to try to address these general concerns. I will now provide a number of examples of what is being done.

The general scheme of the personal injuries assessment board (amendment) Bill of 2017 is being drafted to address the issue of non-attendance at medicals and failure to provide particulars of special damages. The purpose of this legislation is to strengthen the operational powers of the Personal Injuries Assessment Board, PIAB, in order to ensure greater compliance with the PIAB process and encourage more claims to be settled through it.

Calls are frequently made for changes in regard to the book of quantum, particularly in regard to the size of awards. I am sure this issue will be touched upon today. While I accept this argument, I believe it is equally important to try to ensure consistency of award levels through the regular use of the book of quantum by all parties. This should mean that, no matter what way a claim is settled, whether directly by an insurer, through PIAB or as a result of a court decision, the outcome should be broadly the same. A number of recommendations from both reports are relevant to this general area: reviews of the book will conducted every three years when a new statutory requirement in the PIAB (amendment) Bill becomes law; the Personal Injuries Commission is undertaking a benchmarking exercise that involves a comparison between international awards for personal injury claims and domestic equivalents and, in addition, recommendation 5 of the employer and public liability insurance report asks the Law Reform Commission to undertake research and analysis on the issue of whether it is justifiable and in the common good and legally and constitutionally permissible for the Oireachtas to enact legislation to delimit or cap the damages a court may award in respect of personal injuries.

The way in which personal injuries claims are processed within the court system attracts much criticism. The report on employer liability and public liability refers to the issue of specific training in the assessment of damages in personal injuries cases. What we are seeking here is to ensure that the Judiciary have access to appropriate training through a proposed amendment to the Judicial Council Bill and through other training mechanisms already in place.

It is acknowledged that the Civil Liability and Courts Act 2004 has not been as effective as originally envisaged. In this regard, a key recommendation of the report on employer liability and public liability insurance relates to section 8, in respect of which an amendment is being proposed to enhance the effectiveness of the statutory requirement to notify the defendant within one month of the incident by way of the initial warning letter and to align the provision with data protection legislation in terms of the retention of evidence, such as CCTV footage.

Section 14 of the 2004 Act has the potential to be a powerful tool in fighting fraud because, if the provision is used, it should ensure that all parties to an action consider more carefully the evidence they are including in their pleadings as there will be a greater understanding that including evidence that they know to be false or misleading may attract criminal proceedings and a potential conviction. We have proposed an amendment to this section to allow for the court to draw inferences from non-compliance with the 21-day deadline to lodge the affidavit verifying that there are no false or misleading allegations in the affidavit sworn to ground the personal injuries claim.

The report also calls upon defendants to raise section 26 where they believe fraud and exaggeration has taken place in the claim. In this regard, work is ongoing to ensure there is a clear procedure in cases where a judge determines fraud has taken place. A "fraud round table" has been established and is making progress on the development of this procedure so it is clear what insurers should do where they believe the case is fraudulent, and what should be done in instances where the judge comments on fraud on conclusion of the case. The overall aim is to ensure there is a visible deterrent to fraud and exaggeration taking place.

We have heard time and again how frustrating the lack of co-operation or engagement between insurers and policyholders is with companies agreeing to settle without the involvement of the policyholders. We must be mindful that under an insurance contract, the decision to settle or not is in the hands of the insurance company. That is the essence of the contractual relationship between the insurer and policyholder. However, both reports clearly recognise the impact it has on a business when there is no engagement on claims against the policy. The motor report includes a recommendation in this regard and the report on employer liability and public liability insurance has a mirrored recommendation targeted at businesses. It is imperative that we secure the co-operation of industry in this regard.

On data transparency, substantial progress has been made to develop legislation to establish the national claims information database. The aim of the database is to improve the availability of data in the insurance sector. The working group believes that it is necessary to get the motor part of the database up and running first before considering its extension to the employer liability and public liability area as we need to get the foundations right. Undertaking too much at once would be counterproductive.

As stated, there is no quick solution to this issue. The working group has substantially progressed work in many areas. While we have a way to go yet, I wish to confirm the Government's commitment to tackling the cost of insurance. I understand why many believe the pace of reform is not sufficiently quick. While I am not unsympathetic to this view, it is important to point out that a lot of work is being done across a number of Departments and agencies, tackling a multitude of issues that unfortunately take time, particularly where legislation is required.

There is certainly no diminishing of my determination, nor that of the working group, to continue to push for all of the proposed measures to be put in place in their entirety as soon as possible.

I believe it is important to maintain the momentum of the work to date to ensure a more stable insurance market generally and to make improvements to the personal injuries framework.

I am happy to take questions or to provide clarifications to assist the committee on the work of the cost of insurance working group.

The Minister of State has been at this for a good while and it has been a priority for him within the Department. If we were to ask people out and about whether they have seen any reasonable progress in this area, they would probably answer they have not. They would tell us they still see premiums increasing. Indeed, we had a men's shed group before the committee last week. The representatives adverted to the potential threat to their existence in some areas where the number of members is small. This arises because of several factors, including insurance. I had raised the mart sector with the Minister of State on the floor of the Dáil previously but when appearing before the committee, the representatives of the sector stated clearly that if they experience anything close to what they have experienced in the past three years, marts will close down with all the associated effects. We heard from other community groups about how the cost of insurance is increasing and taking up a large proportion of core costs.

We know about all the reforms proposed. The Minister of State referred to the percentage implemented. How come we are not seeing significant decreases in the cost of insurance?

I am at this for 11 months. My predecessor was working on it before me. As I said in my opening statement, it is not about writing reports but the implementation of those reports. Why are premiums not reducing? As awards go up, so do premiums. We have a high-award system in Ireland. I may not be pleased with that and others may not be pleased with that. Anyway, there is a line I use when I explain the insurance sector in Ireland. If we have a high-awards sector, we will have a high-premiums sector as well. Whether I or anyone else is pleased or displeased with that, the awards in this jurisdiction are very high.

Have we not put that argument to bed? The research done does not show that the level of awards in recent years has increased anywhere near relative to the increases we have seen in premiums. The Minister of State has referred to a high-awards jurisdiction but that was always the case. Yet, premiums have increased numerous times.

Let us extend the argument. We heard the most recent example from mart managers. A case in point arose when an individual was bitten by a horse. No one could make this up. The mart does not own the horse. An individual was bitten by the horse. The insurance company settled because it was easier for the company to settle. Who picked up the tab? It was the mart that did not own the horse that bit an individual. That is what is going on. That is not about the cost of claims. It is about issues identified over a year ago where there has been settlement of claims in cases that should not have been settled.

Several issues arise. There was also the case of the award to the individual who dropped his trailer on himself in mart grounds and the award was made against the mart. There is a reason there is settlement of these claims. The primary reason is that the insurance companies make a calculation and decide it is cheaper to settle rather than go through the court process. This keeps going back to one aspect that we cannot avoid. As a person goes through the court process in Ireland, the awards are high. A simple calculation is performed by insurance companies. It is cheaper to settle, regardless of whether the claim is legitimate, than to go through the courts process.

The question of transparency arises. We do not have sight of the information or all the data. The area we have sight of covers the PIAB and the courts. We do not have data on what is settled on the steps of the courts or on claims settled before they get to that process.

I will come to the issue of claims but I will make another comment before I move on from the marts issue. The representatives before the committee last week referred to potential health and safety works that were required. They were carried out in the past by certain marts but the premiums still increased. Following the recent accident in one of the marts, there was a call for substantial work in several marts. Those involved called for some type of grant aid to support the industry to reach new health and safety standards. The hope is that there would be acceptance by the insurance industry that such a move would result in the premiums falling. Is that something the Minister of State is open to discussing with mart operators?

That takes me on to questions on the claims database. The Minister of State referred at the end of his contribution to a phased approach. I got a nice letter from Insurance Ireland. That body was giving out to me about what I had been saying about it and its objection to what is being proposed. I said it was a sick joke, given that the commission is actually investigating Insurance Ireland for potential cartel-like activities involving deterring new entrants from the market. Yet, in the Insurance Ireland submission to the Department's consultation exercise, the body suggested that the national claims information database would do exactly what Insurance Ireland is accused of doing, that is, it would prevent additional or new entrants to the market.

Does the Minister of State have a view on curtailing the type of information that would be collected? Does he have a view on the requirements on the Central Bank to report in the way suggested in the heads, that is, with regard to transparency and the links between premiums and insurance and so on? That is something we know Insurance Ireland does not want the Department or the committee to do. Is there any rowing back from the Government with regard to what is being proposed? Can the Minister of State tell us when we are likely to see that database?

I am certainly open to any conversation about any area where we can try to help to improve health and safety. It is not something that I can guarantee will happen, but I am certainly open to any discussion on anything of that nature.

Deputy Pearse Doherty referred to the national insurance claims database. I will read the note because it is comprehensive and it is an important aspect of the work we are doing. The development of a national claims information database is a complex project, as insurers often record data in different ways and we do not necessarily use the same definitions. On 19 December 2017, the Government approved a general scheme for a national claims information database. The Bill is included in the Government legislative programme under the list of priority legislation for publication in this session.

I note this committee indicated to the Minister for Finance in February that it would not conduct pre-legislative scrutiny on the Bill. The Office of the Parliamentary Counsel signed a draft of the Bill on 26 January 2018. Officials in the Department of Finance are currently working with the draftsman to finalise a draft of the Bill as soon as possible. I understand that good progress has been made and I hope the Bill will be published before the end of this legislative session. Consultation also must take place with the European Central Bank on the Bill once it is published. It will take a certain amount of time following publication of the Bill for it to pass through the Houses of the Oireachtas. However, I am hopeful that with the co-operation of all parties in both Houses, it will be considered and approved quickly.

To ensure the database can be put into operation quickly following enactment of the legislation, the Central Bank has continued to work in parallel on the technical specification for a database.

We are going ahead with the legislation in line with the heads of the Bill.

Insurance Ireland has particular objections to head 4 of the Bill which was the piece that provided for transparency. It talked about identifying current and emerging trends in the Irish non-life insurance market on an Irish-based risk business. It identified factors that drive movements of price of insurance in the State. All of this will be required to be reported on. There will be a requirement for the granular data to be provided to the NCID for those reports to be furnished. Is that correct or is the Department mindful to accept Insurance Ireland's views that this would deter new entrants into the market?

Senator Gerry Horkan took the Chair.

Is the Deputy talking primarily about the settlement channels?

No, I am talking about head 4 which requires the Central Bank to publish a report for the purposes of increasing transparency, identifying current and emerging trends in terms of insurance, identifying the factors that drive movement in the price of insurance, presenting statistical analysis of income and costs and presenting statistical analysis of information related to the claims and settlements. My understanding is Insurance Ireland has no issue with the last two but it takes issue with the preceding points.

We are satisfied to proceed with the head as it is.

Okay. The other point I wanted to talk about was the motor insurance directive. Last week, the European Commission announced its intention to move ahead with a motor insurance directive that was among its proposals to force insurers to take account of previous driving experience in the European Union. Is there any reason we cannot move ahead and implement this without waiting for an EU directive to pass? It is something that would be highly beneficial given patterns of immigration to this country during the past decade. What other elements of the directive might work as well in terms of insurance cost?

That side of it is not part of my brief. The motor insurance directive is with the Department of Transport, Tourism and Sport.

We will take that up with that Department. Going back to the insurance database, it is behind schedule. I asked the Minister of State earlier when we are likely to see it up and running.

We expect to have the Bill published before the end of this session. It depends on the speed at which it goes through both Houses. I am hopeful it will be sooner rather than later. I cannot give the Deputy a date. I do not know when it will go through. As I said, the work on the establishment of the database is happening in parallel with the legislation. The Central Bank is operational on that.

I understand the Minister of State does not have the ability to set the agenda of the House in the Business Committee. The Minister for Health stated it is his intention that not only would legislation on access to terminations of pregnancies pass the Houses but also that he hoped legislation on the clinical directions and registration or licensing of the drugs required for terminations would be concluded by December. Will it be possible to have the national claims information database up and running by the end of the year or is it more likely to be 2019 or 2020? What is the timeframe?

I am hopeful we can get the legislation through both Houses this year. That is my objective. That is pretty decent. It is a complicated Bill. I hope we can get the legislation through and during 2019 we could get the national claims database up and running. That is realistic. I do not want to give the Deputy a date that is not realistic. It will be at some stage in 2019 but I cannot say what stage in 2019 it will be. If we can get the legislation published before the end of this session and through both houses before the end of this year, it would be a good body of work. Work is continuing in parallel with the Central Bank on this.

When will the Minister of State publish the legislation?

Before the end of this session.

The committee is eager to have the database up and running. We recognise its importance. Having the legislation passed will not make a blind bit of difference until we have the data in the national database and can analyse them. We are very eager to have this proceed, which is why we believe the legislation did not need pre-legislative scrutiny. If the Department is delaying publication of the Bill, there was no point in doing that. The database was identified as being key to transparency. It is deeply disappointing that we will not have a report and the database will not be up and running, never mind churning out information, for another year. It shows a failure to recognise the magnitude of the increase in premiums for motorists, businesses and the community sector.

It is important to get this right. This is new and we want to make sure that what we do we do well. The objective is to make a start with motor insurance and then expand it into employers' liability and personal liability insurance. That is the prudent way to manage this issue. We could do it faster but I am not sure we would do it better if did so.

That is me finished.

We had various groups in last week. Some of the key points they made were about areas that have already been covered, specifically the national database and the book of quantum. They also wanted to see developments with the Garda fraud unit. Did the Minister of State indicate that comes under the Department of Transport, Tourism and Sport?

No. It is under the remit of the Department of Justice and Equality but-----

I just had a look at the fifth quarterly update on progress. I refer the Minister of State to page 24 which deals with the establishment of the national claims information database. According to the report, it was agreed in quarter 1 of last year that key aggregate metrics for immediate publication would be specified and the development of a national claims information database would be commenced. The Department was looking to have legislation in place for a national claims information database by quarter 1 of this year and the national claims information database established by quarter 2 of this year. The final point, on recommendation 13 of the progress report, was that a report on a claim-by-claim register would be delivered.

What is coming across is the lack of hard data from the insurance industry. When representatives of FBD appeared before the committee they claimed insurance claim costs were increasing. I would have liked to have seen a breakdown of the figures on claims. FBD stated that 60% of the costs it pays out relate to claims, with legal fees accounting for the remaining 40%. I am open to correction on those figures but they are more or less accurate.

In terms of the analysis and the claim-by-claim register, has the Minister of State had the opportunity to peruse and obtain an analysis of the published accounts of the main insurance companies for the past number of years? The problem is we do not know if the value of claims is increasing. Various solicitors involved in personal injuries tell me the value of claims being paid out to their clients is declining, whereas FBD informed the committee of a particular court case that has resulted in an increase in the value of claims. The Minister of State probably knows more about that case than I do. To be analytical, will the Minister of State address the national claims information database in terms of the metrics? The fifth quarterly update was published only this month. Is the database on schedule? Has the report on a claim-by-claim register been delivered? Will the Minister of State update the committee on the special fraud unit within An Garda Síochána?

In terms of the second portion of that, which is the-----

A claim-by-claim register?

Yes. That is what is being worked on by the Central Bank at the moment in parallel-----

In quarter 2 of this year.

There has been a public consultation on that. We have just concluded that.

Are we still on target to have that ready by quarter 3?

Is that being prepared by the Department or by the Central Bank?

That is the analysis by the Department. The work that is being done with the Central Bank will concern the interaction between the Central Bank, the insurance companies and how the information comes in so that-----

The Department is still on track to publish that by quarter 3. That would be very interesting.

What we are trying to do is make sure that when we are able to go live with a national information claims database when the legislation is passed, the work will have been conducted-----

-----in parallel so we can start with motor insurance. We do not think it prudent to go beyond that until we get it up and running, try to get it tested and see whether we can make sure that it will do exactly what we want it to do.

It is stated that the national claims information database will be established.

We are in quarter 2 of 2018. Is that on target?

There is a delay in the legislation so it is not on target, but we hope to have the legislation published before the end of this session so we might slip into the next quarter or quarter 4. There is a bit of delay in respect of that.

Is the empirical work around it substantially completed?

That is happening in parallel-----

What about the Garda special insurance fraud unit?

I have spoken to the Minister for Justice and Equality about this. It is really a matter for An Garda Síochána. Do we want to take resources away from the job gardaí do, namely, fighting crime and being out on the beat, so that they can be specifically involved in insurance fraud? It is a recommendation within the reports. Neither the Minister for Justice and Equality nor I have the authority to instruct the Garda Commissioner to do that. It is not in place as of yet but the Minister for Justice and Equality and I will speak to the new Garda Commissioner when he or she is in place. We will see how that plays. As I said, we do not have the authority to instruct the Garda Commissioner to implement that. As the Senator will see with so many of the recommendations, they are not within the Department of Finance but they are the responsibility of the Department of Justice and Equality, the Department of Transport, Tourism and Sport, the Department of Business, Enterprise and Innovation, the Central Bank, An Garda Síochána, and other agencies. We must pull all those threads together. We are pretty much on target but we are into the heavy lifting relating to legislative movement. With the co-operation of all parties and the committees, the sooner we can get these pieces of legislation concluded, the better.

As was said by others, the real frustration is that with all the work we did with all of the actors around the insurance industry, in which the Minister of State was involved, people do not see the difference. We have all of these inputs and no real outcome for people. An 18 year old individual was quoted €6,785.01 for insurance on a 2004 Ford Fiesta while a business with insurance for €20,000 in 2015 is now quoted €102,000, so they are still getting away with this crazy situation. I know the CSO statistics will say insurance premiums have come down and I wish I could say that but in all cases I have come across and from all the people who engaged with me, I can say that this is happening across the board. Does the Minister of State think it is right for an 18 year old to be quoted €6,785 for insurance? What does that say to the Minister of State?

May I outline a few things? The often quoted figure is an increase of 57% in insurance from the low point. That low point was the result of what was effectively a price war. Price wars tend not to work out well. Eventually, somebody ends up paying more down the line because there has been an undercutting of business to try to achieve higher market gain. Some motor insurance policies cost less than changing a windscreen. We have lost a number of participant insurers from the market because of that price war. It has not worked out well but we still seem to use the same CSO data when it comes to the increase. The decrease in motor insurance is 20%. That is what the figure is according to the CSO. Do I come across people who have got motor insurance reductions? Yes, I do, but we must-----

We need to examine the CSO figures.

People have to shop around. I have spoken to just about everybody and every sector regarding insurance, including motor insurance. The story I use best concerns a man who rang on behalf of his son. He was 31 years of age and using an eight year old car. His insurance went up by €150. I told him to shop around so he went to his broker who told him that this was the best the broker could do. He subsequently went to another broker who went to a number of companies and got the same price in the first case without the €150 increase but he got that from the same insurance company the customer was already with.

I do not want to interrupt but a vote is being called in the Seanad and both Senator Conway-Walsh and I could participate. We can agree to suspend the meeting and come back at 6.30 p.m.

I am paired so I can be here.

The Senator is okay so.

Does the Vice Chairman need to suspend the meeting?

We will keep going for a couple of minutes.

I will be very brief. I am also concerned that the Minister of State does not understand the gravity of it and what is-----

Please, do not make a statement like that.

I have to tell the Minister of State that I am concerned.

The Senator said that I do not understand the gravity of the situation.

I said I am concerned-----

Do not be concerned.

-----that the Minister does not have the picture.

Do not be concerned. I do understand the gravity of the situation so the Senator should not make a statement like that.

I will tell the Minister of State about my own experience with insurance. I went to the insurance company and different people. Nothing has changed in the year. It still went up 20% with everything remaining the same. I would not be sitting here at this time of the evening if the situation was not serious. I acknowledge the Minister of State's input but we are not getting the outcomes. Does he think there is a role for the State because I do not think we can continue to leave this to market forces? I think the same habits and behaviours in the industry are happening. This is having a real impact on people getting insurance.

There is no role for the State because if the State intervenes, the same rules and regulations under which the private insurance companies are governed and the same awards that are awarded by the courts will apply to a State company. If the State enters the market to do so, the same regulations and the same Solvency II rules will apply. On each occasion where there is an outlying award outside the book of quantum, the insurance companies will have to have those figures underwritten. If it is a car accident where somebody breaks their arm and the book of quantum says it is a certain amount-----

We will skip it because I know we are pressed for time. Is it the case that the Minister of State is not considering a State intervention at this time?

Does the Minister of State think the ongoing investigations need to extend to the marts and community groups in light of what we heard last week?

Which investigations?

The ongoing investigations into anti-competitive practices.

I will not comment on that.

Okay. We will talk about it in another forum.

I wish to clarify a few matters. There was talk that the national claims information database would be available in the second half of 2018 but now it is said that it definitely will not be before 2019.

The establishment will depend on the Oireachtas.

Would it be unrealistic to expect it before 2019 at this point?

Yes, it would be.

One would hope it would be up and running. Obviously it will become more useful over time because one is relying on more volumes of data. Will it be the first quarter or first half of 2019?

I am hopeful it will be sooner rather than later. There will not be any delay from our side of the House.

Okay. An anti-fraud unit was recommended. The Minister of State touched on it already but is he asking if we want to take gardaí off the beat or the front line?

That is a question the Garda Commissioner will have to answer.

We had representatives of the Alliance for Insurance Reform before the committee last week. I do not know if any of the Minister of State's officials got a chance to watch that meeting, and I presume he was doing other things. Point No. 8 of their submission states:

The CIWG motor insurance reports promised a dedicated Garda unit to focus exclusively on the investigation of insurance fraud. We want the unit established as a matter of urgency. [That is their request.] The Minister tells us that there is not enough support in the House for this. If this is the case, we urge any opposing parties to clarify their concerns and resolve whatever blockages exist.

Does the Minister of State believe that to be the case? That is what they told us he said.

What I have been told is that not everybody is in agreement with the removal of gardaí from policing duties to be deployed to an anti-fraud unit.

Have any specific parties said they are not in favour of this?

People have said it to me in private, but I do not know if they have said it in public. That is the information I have.

What is the Minister of State's opinion? Does he think it should be set up or would he be concerned that by setting it up, it would be taking resources away from other Garda priorities?

I am in two minds, but my opinion does not matter. It is a matter for the Garda Commissioner.

Who asks the Garda Commissioner to do this?

The Minister for Justice and Equality.

The Minister of State does not feel in his role of trying to drive down insurance-----

I have asked the Minister for Justice and Equality to progress this. My view does not matter. It is part of the report and we are trying to implement it. I have asked the Minister to speak to the Garda Commissioner when the new Commissioner is appointed.

In the absence of a Garda Commissioner being appointed would it not be perfectly reasonable for the Minister for Justice and Equality to ask the acting Garda Commissioner?

I do not believe so. It is a matter for the incoming Garda Commissioner.

We will have to wait until a new Garda Commissioner is in place. It is not the Minister of State's brief but does he have any idea when that might be?

Another point that was raised last week was public liability insurance, and I believe this was raised when the Minister of State was still a member of this committee when the Licensed Vintners Association, LVA, and the Vintners Federation of Ireland, VFI, appeared before it. Two of the members of the Alliance for Insurance Reform are from the LVA and VFI, in addition to the many other bodies and community groups in the alliance. Its representatives made the point that a personal injury claimant has a two-year window to make a complaint. If somebody allegedly has an incident today or tomorrow, the person can wait two years to make that claim.

At the same time the Data Protection Commissioner says CCTV footage can only be retained for a month. Is there any way we can resolve that quickly? I have no problem with people who have genuine claims. No one has a problem with genuine claims being pursued. However, it is two years later. In the hospitality industry, including restaurants and licensed premises, and even in supermarkets there are a lot of casual staff and there is much turnover of staff. There are people on summer jobs, people coming into the country and working for a year or 18 months and people moving from one job to another. If somebody asks what happened on a night two years ago, who will remember? If the company is lucky enough to have the same staff, it might be possible. What can we do about this? Obviously, some of these claims are being paid. It is very hard to fight a case two years after it has happened.

It used to be three years. The period in which somebody has an opportunity to make a claim has been reduced from three years to two years.

When did that happen?

That is 14 years ago.

Yes. It is appropriate that somebody should have a period in which he or she can make a claim.

What would the Minister of State consider to be an appropriate period?

The Minister of State thinks it is perfectly okay.

We have looked at that and we think a two-year period is relevant. Somebody might have an accident and some symptoms may not show up for some time. What the Vice Chairman is talking about is dealt with in section 8 of the Civil Liability and Courts Act 2004. It is the same Act that refers to the period in which somebody must present. With regard to the data protection rules, we are going to reconcile the data protection period with section 8 whereby somebody will have to give the insured person a warning letter that there has been an incident within the period of time under the data protection rules so the imagery, video footage or whatever the case may be can be retained and saved so somebody can have a proper defence.

The Minister of State is saying there is a two-year window for people to make claims but that within a month, under data protection rules, they would have to at least alert the relevant premises that something has happened and that they might be making a claim within the two years.

That is correct. They have the two-year period following that to make the claim. There is an important aspect to this. That section of the law stands at two months, but it has not been used. The next stage is section 14. If people do not give the insured person the opportunity to retain the imagery or the CCTV footage, an inference can be taken by the court against the individual because the insured person did not have an opportunity to have a proper defence.

However, we are still relying on the courts to interpret that. The Minister of State is not saying that a claim cannot be pursued if there is no preliminary notification of an incident within a month.

That would be unreasonable if somebody did not have the opportunity. Somebody could be injured and in hospital for a month or five weeks. If we prevent that person from making a claim, that would be unfair. The person has to show grounds for why he or she did not present to give the insured person the opportunity to have the evidence of the video footage retained.

There was much talk about soft tissue injury, whiplash and our payments being different from those in other countries. Do we have the same medical scan technology? Do we look at soft tissue injuries in this country in the same way as they are viewed in other countries? If not, why not? If so, why are our payouts so much higher? There appears to be an acceptance in the Minister of State's opening remarks that countries with high payouts will have high premiums. What can we do to reduce those payouts?

We cannot do anything.

There is nothing we can do.

It is a matter for the Judiciary to reduce the awards.

Is there nothing the Government or the legislative process can do to put a better benchmark in place?

We have put the question to the Attorney General. The Attorney General was satisfied it was not a "yes" or "no" answer. In the civil court it is a matter between two individuals, one individual perhaps being an insurance company and the other individual making the claim. The Oireachtas does not intervene there. The issue is about trying to get the Judiciary to adhere to the book of quantum. If one wishes to reduce the book of quantum, the Judiciary can do that.

The Minister of State can correct me if I am wrong but the book of quantum is purely a statistical history of what has happened.

That is correct.

If judges bring down the claims over time, the book of quantum averages will fall over time. Equally it will reflect if the Judiciary pays out more. It is not the book of quantum but the claims judges pay out. There seems to be a great difference between what one judge will pay and what another judge will pay. We certainly heard that in our earlier hearings with regard to motor insurance when the Minister of State was a member of the committee. A judge might be supposed to be hearing the case, but when a company discovers it is a different judge, it will suddenly settle for far more because that judge pays out twice as much as somebody else. I am not having a go at judges, but we are all paying higher premiums and we see the court reports in the newspapers every week. Again, we do not have visibility of 70% of the cases. That is where it is hoped the Minister of State's database will provide us with some clarity, whenever it gets going. We are all paying more, however, because judges seem to be able to pay out whatever they wish.

Is the Minister of State saying that the Legislature or the politicians within the four walls of Leinster House, are not in a position to do anything about the matter?

That is why we have asked the Law Reform Commission to take on this matter. People have a constitutional right to access courts.

We accept that.

As a result, to date we do not think the Oireachtas has the right to do so. If the Law Reform Commission takes on this body of work, the process will be fed into by consultation. Following that consultation, perhaps the commission can come back to us with a clearer position on the matter. As of now, the Oireachtas probably cannot do so.

There is a lot of frustration here. I am a relatively new Member of the Oireachtas. This committee has done a lot of work on motor insurance and produced a very good report, to which the Minister of State contributed. He was a signatory of the report at the time. Senator Conway-Walsh and I, as well as all the Deputies and Senators, participated in the preparation of the report. The report was published in November 2016 and a year and half has elapsed. People watching this debate will have heard phrases such as "it is down the road", "we are looking at it" and "we have asked the Law Reform Commission to consider the matter." I am not having a go at the Minister of State and note he only has this brief for the past number of months. The Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, is a former Minister of State at the Department of Finance and had been responsible for this matter. Is there hope this matter will be resolved? Can he give five examples of changes so that we can tell people what changes have been delivered? I know the cost of house insurance and property insurance has increased. Insurance brokers try to get the best deal for their clients and recently, I met a broker who told me about a fairly significant business that may close due to the hike in premiums. It simply cannot make money any more based on the cost of insurance. The company has not had a claim lodged against it yet its premiums have increased.

It is a frustrating situation. The Minister of State has made opening remarks and so on. Can he outline what has happened in the past while? I seek three or four bullet points in order that we explain to people why the situation has or has not improved and what might happen to improve the situation.

I must disagree with the Vice Chairman and stress the figures for motor insurance are in my favour and not his. According to the CSO, there had been a 57% increase in insurance premiums but since they reached their peak, there has been a 20% reduction in motor insurance premiums.

When was the peak?

The end of 2015 and early 2016.

Is the Minister of State stating that motor insurance premiums, statistically across the country, have decreased by 20% since the end of 2015?

I have not met many of those people. Perhaps I will not because they will no longer complain due to a reduction in their premia. I know that my car insurance has not decreased even though I have kept the same car and have not had any penalty points awarded against me or any incidents.

I hope that the Vice Chairman challenged his insurance provider when it quoted a certain amount for insurance.

I hope that the Vice Chairman shopped around. All those who have listened to my advice to shop around have had their car insurance premium reduced if it is a similar car with a similar mileage and no penalty points awarded or change in circumstances

Has there been a 20% reduction in the cost of motor insurance premia since the end of 2016 until now?

Yes, according to the CSO figures.

These are not my figures. They are independent figures.

I have requested something that did not form part of the cost of insurance working group. I have a small business and employ people and so I pay a number of insurance fees. One of the things that I have asked, and it will happen soon, relates to the cost of insurance last year. As a small employer and businessman I have 11 insurance policies for machinery, public liability and other types of insurance. I want people to know what their figure was last year for comparison purposes. I know many companies or people who wonder how much a certain type of insurance cost them last year. They may have the details locked away in a filing cabinet but they may not have the time to search for them and get quotes. For me, it is a small issue that can easily be resolved so that last year's price is listed on the same page as this year's price. Having both prices enables one to see if the price has increased or decreased. Obviously if the price has decreased then people will be pleased. I have spoken to people who have multiple insurance cover and some of them do not know what they paid last year. Have they time to get insurance quotes? They probably do not.

It would make a huge difference if people adhered to the book of quantum. If they did it would not matter whether an individual settled directly with an insurance company without the assistance of legal advice. It would mean that for every outlying award that is a multiple of or 50% more than the standard amount, under the Solvency II rules and the regulations, insurance companies are obliged to underwrite that amount. That means if it is €25,000 for a broken arm and suddenly there is a payout of €45,000, the solvency rules will ensure that the insurance company is capable of making the payout. Therefore, it is crucial that we get people to adhere to the book of quantum. Whether the book of quantum is used by an individual to settle with an insurance company early or whether a case goes to the High Court, it will not matter as the case should fall within the numbers stated in the book of quantum. Such a scenario would be greatly beneficial. As we have seen with insurance companies, it is a business. The business is not black and white but is a predictive business. On the basis of the business being predictive, premiums have increased and reduced. Therefore, it is incorrect for the Vice Chairman to claim that the cost of insurance has only increased. The cost did go one way for a period but since July 2016, the cost of motor insurance has reduced by 20%.

We only published the report on employer and public liability insurance in January 2018 and we have concluded all eight of the first quarter recommendations within just four months. Moreover, we will conclude 26 of the 29 recommendations in this calendar year. As I have said about motor insurance, all of these actions will have a cumulative effect and there is no single bullet to remedy the situation.

How much fraud exists in the sector at present? What form does it take? Is there anything to deter people making fraudulent claims?

One hears that people have their claim withdrawn, dismissed or settled. It seems that nobody pursues them afterwards to say that their claim was a complete try-on.

If people thought that they would be prosecuted, jailed or named and shamed for making false claims then perhaps they would not do so. Private investigators have discovered by using Facebook that somebody who was barely able to walk is involved with mixed martial arts, is a personal trainer or goes rock climbing.

Or does bungee jumps.

Yes, or have been seen on bouncy castles and that kind of stuff. People lodge claims yet if they lose they just walk away scot free but somebody ends up paying legal costs. I am sure the insurance company will have to pay for its legal and investigation costs. There does not seem to be anything to deter people from lodging false claims. Maybe there is but the public are unaware of it and I ask the Minister of State to enlighten us.

The question is, which is the bigger issue, fraudulent or exaggerated claims? I do not know.

Are they not the same? Is exaggeration not fraud?

An example of a fraudulent claim is where somebody stages an accident. Let us say there is a fully staged accident with a number of participants, one person rear-ends somebody else and a person claims to have been injured. An exaggeration is where somebody has been in an accident.

Is that arguably a form of fraud? A person purports to do something he or she did not do.

Yes. That is a complete fraud.

Is an exaggerated claim deemed to be fraud but to a lesser extent?

Yes, it is planned fraud. An exaggerated claim is where somebody has been injured but he or she chooses to exaggerate his or her claim.

We have analysed the legislation and sanctions. We believe that the legislation is fine and I refer to sections 5, 25 and 26 of the Civil Liability and Court Act 2004. There is no issue with the legislation or the sanction. There is an issue with the pathway from where a judge in a civil court believes there is an element of fraud or exaggeration in the claim and suggests something should happen. The Garda Síochána is the investigating authority for criminal sanction and it has investigated fewer than a dozen of these cases in the 14 years that have elapsed. I have met the Minister for Justice and Equality to discuss the matter and try to put in place a proper and correct pathway so that if a judge says, "I feel there is an element of exaggeration or fraud in a case" the Garda can investigate and present a file to the Director of Public Prosecutions, DPP. The sanction is €100,000 or jail time. The sanction is fine and it is also a criminal sanction. We are satisfied that the legislation is fine. We are not satisfied that the pathway between a justice in a civil court, the Garda Síochána and the DPP can do what the Vice Chairman suggests.

Should the insurance companies or the Garda Síochána on behalf of insurance companies pursue the matter?

It is a matter for all parties, as far as I am concerned.

Is this a matter for the Garda insurance fraud unit?

This matter does not require a specific Garda fraud unit to be established. Any garda can bring a case and investigate a case.

Is legislation required to make people do this or require people to do this?

No, there is not.

Could we have that or would-----

I have agreed with the Minister for Justice and Equality to try to conclude that and put a better pathway between the judge in the civil court, the Garda, the DPP and the insurance companies.

Would that require legislation?

How would it work?

The major recommendation is that a new set of guidelines be drawn up between Insurance Ireland, the Garda and the DPP. It should be ensured in particular that any case dismissed in court on the grounds of false or misleading evidence, whether under section 26 or otherwise, is automatically at least considered for investigation by the Garda. It would be an automatic investigation, notwithstanding the different thresholds to be reached in civil and criminal cases. A new set of guidelines will be drawn up to standardise and improve the development of cases for submission to An Garda Síochána.

I presume guidelines are guidelines and are unlikely to be binding. When are they likely to be published?

We expect that before the end of the third quarter of this year.

That gives us some hope that people are, or will become, aware that making such claims will result in an automatic examination of the issue by the relevant members of the Garda and so on.

I will conclude this point by stating the working group strongly believes there is an onus on all of the insurance providers themselves to be more proactive in tackling fraud by fighting dubious claims, putting more resources into detection, building up a strong evidence basis and following up cases with the Garda at regular intervals. This reverts back to some of the insurance companies that settle too quickly and easily against the wishes of the insured person. However, as is always the case, it is for the insurance company to conclude the matter and not the insured person.

I have a final point on that issue. Before an insurance company settles, should there be an onus on it to go back to the insured person and let him or her know? We have sometimes heard of a claim against a business - a sprained ankle for example - being settled for €15,000 or €20,000 to get rid of it. The publican, restaurateur, supermarket owner, takeaway owner or whoever wanted the claim to be fought because it had no hope but often it is not. Should the insurance company not have to go back to its client because that client will be billed with a higher premium by the company in the future to recover the costs paid out?

Even if the company did go back, it would only be a consultation. That is all, it is a matter for the insurance company.

It might change the behaviour of the company slightly in respect of just paying out and being done with it?

I do not think it would. It is the prospect of-----

There are no plans to do that anyway?

No. It is the prospect of having to pay the legal costs that is the bigger issue.

I thank the Minister of State for all the work he is doing. I look forward to my motor insurance coming down along with everybody else.

Senator Horkan should shop around.

I have been shopping around and I did not get a better deal. Perhaps I was on a very good deal in the first place. I do not know.

That could be the case. He may be a very low risk.

I am definitely a very low risk. I hope everybody is watching. I thank the Minister of State and his officials for attending. The joint committee is now adjourned until Tuesday, 12 June. I remind members who are Deputies that the select committee is meeting this Thursday, 31 May, at 10. a.m. to deal with Committee Stage of the Markets in Financial Instruments Bill 2018.

The joint committee adjourned at 6.43 p.m. until 2.30 p.m. on Tuesday, 12 June 2018.