Is onóir mór dom bheith ar ais arís i Seanad Éireann chun freastal ar an mBille an-tábhachtach seo. Is é seo an Bille Árachais, 1999, agus tá mé chun eolas faoi bhreis a chur do mhuintir na tíre ins na heachtraí agus an gnó a bheidh sibh á dheanamh le daoine a bhfuil ag obair le árachais ar fúd na tíre.
I am pleased to bring this Bill before Seanad Éireann. The purpose of the legislation is to update the regulation of certain aspects of the insurance industry. The objectives of the Bill are to allocate regulatory responsibility for insurance intermediaries to the Central Bank of Ireland and to utilise the regulatory powers available to the Central Bank, under the Investment Intermediaries Act, 1995, to enable the Minister to make disclosure regulations to require insurance undertakings and intermediaries to make relevant information of a specified nature available to insurance consumers, to strengthen the existing system of notification by reinsurance undertakings and to enable the Minister to make regulations for the authorisation and supervision of reinsurance undertakings, to update existing provisions for offences and penalties and to enhance the powers of authorised officers for the purposes of the Insurance Acts and regulations.
I am sure it would be of assistance to the House if I were to summarise briefly the general background to the proposals contained in the Bill. Later I will explain in more detail for the benefit of the House the content of some of the more complex provisions. Where relevant, I will draw the attention of Members to the important amendments introduced to this Bill during the various Stages of debate and subsequent passage through the other House over the past few months.
Insurance undertakings employ almost 11,300 people in Ireland today. In addition, there are approximately 6,500 insurance brokers, agents and tied insurance agents, many of whom are employers of staff. Gross insurance premium income for 1998 amounted to £10.6 billion, of which 70% related to life assurance and the remaining 30% to non-life. Gross premium income increased in 1998 by 41% on the previous year's figure. It is interesting to note that 31% of this business is written in other European economic area countries.
In round figures, there are 1,900 insurance brokers, 1,500 insurance agents and 3,200 tied agents, as well as the sales forces of the undertakings themselves, involved in the sale of insurance products. Of life assurance business, 50% of annual premium is transacted by brokers, 1% by agents, 22% by tied agents, 25% by company sales forces and 1% is effected directly with the insurance undertaking. Where single premium is concerned, brokers transact 75% of insurance business, agents 1%, tied agents 15% and 9% of the business goes directly to the undertakings.
On the non-life side, the insurance industry has advised me that approximately 70% of this business is transacted by intermediaries. Some 55% of non-life business is accounted for by motor insurance, of which approximately one third is transacted directly with the insurers by telephone, fax or over the Internet. The Internet is a mechanism for doing business in this area. The amount of business covered is growing constantly. There has been a major increase in the number of people using the Internet, through e-business and e-commerce, to get their business done. The percentage of direct insurance has been increasing significantly in recent years, with several new companies specialising in this format of business.
The regulation of insurance intermediaries was first provided for in law by Part IV of the Insurance Act, 1989. This provided for a relatively simple system of self-regulation by the insurance industry itself under the overall responsibility of the Department of Enterprise, Trade and Employment. The 1989 Act defined three separate categories of insurance intermediary. First is the insurance broker, who acts primarily as an agent of the client and must hold appointments from at least five life companies to transact life assurance business and-or from at least five non-life companies to transact non-life business. Second is the insurance agent, who acts as an agent of the insurance company and who may not hold more than four appointments from life companies to transact life business and-or no more than four non-life companies to transact non-life business. Third is the tied insurance agent, who enters into an arrangement with a par ticular insurance undertaking, whereby he or she undertakes to refer all proposals of insurance of a particular form, that is, life or non-life, to that undertaking. The insurance undertaking concerned is responsible for any act or omission of its tied insurance agent in respect of any matter pertaining to a contract of insurance offered or issued by that undertaking, as if the tied agent were an employee of that undertaking.
A notable feature of the retail insurance industry is the overlap between brokers and agents, with many individuals or firms acting as brokers for one form of insurance business and as agents or tied agents for the other form. The Irish Brokers Association, as a body recognised by the Minister for the purposes of the Insurance Act, undertook supervision of its members' compliance with the Insurance Act. In addition, the Insurance Intermediaries Compliance Bureau was established by the Irish Insurance Federation as a central compliance checking facility for all other insurance intermediaries. A major regulatory function fell to the insurance undertakings themselves in that they may not appoint a person to market their products or pay commission other than to an intermediary who is either a member of a representative body of insurance brokers recognised by the Minister whose rules require compliance with the Insurance Act, or a person who otherwise complies with the provisions of the Act.
The Investment Intermediaries Act, 1995, introduced detailed procedures for the regulation of investment intermediaries, with regulatory responsibility allocated to the Central Bank and the Minister for Enterprise, Trade and Employment. Under the Central Bank Act, 1997, the supervisory role allocated to the Minister in respect of certain categories of investment intermediaries was transferred to the Central Bank, with effect from April 1997. In recent times, there has been considerable blurring at the margins of investment and insurance products and a significant number of intermediaries are engaging in both investment and insurance business.
The Central Bank is well equipped with a robust regime of regulatory and enforcement powers under the 1995 Act to supervise investment intermediaries and has acquired valuable experience in carrying out this function effectively since 1995. The impact of the Bill, when enacted, will be to bring insurance intermediaries within the same regulatory regime as investment intermediaries under the remit of the Central Bank.
It is against this background that I want to outline the reasons I believe it is necessary to restructure the system of regulating insurance intermediaries and to allocate responsibility for this function to the Central Bank. The system of self-regulation is no longer appropriate to an area of such fundamental importance to the consumer. The existing regulatory provisions under the Insurance Act, 1989, are inadequate to regulate the activities of insurance intermediaries. The powers available to the Central Bank under the Investment Intermediaries Act, 1995, are more comprehensive and robust than those available to the insurance regulators under the Insurance Act, 1989. The considerable overlap between the activities of insurance intermediaries and investment intermediaries requires that the same regulator should cover both activities.
There is a need to minimise the opportunities for regulatory arbitrage, that is, an intermediary using the existence of different regulators to place itself under the least onerous regulatory regime. There is also a need for a level playing field of regulation for insurance intermediaries and investment intermediaries who are now facing into direct competition, particularly in the area of single premium life insurance. Insurance and investment intermediaries are now equally bound by the provisions of the Investor Compensation Act, 1998, which is working very well. The proposed establishment by the Government of a single regulatory authority for all financial service providers will, in any event, bring insurance and investment intermediaries together under the one single regulator. This Bill will launch the initial stage of this process.
On the question of a single financial regulator, discussions have taken place between officials of the Department of Enterprise, Trade and Employment and of the Department of Finance and the matter is being considered by the Tánaiste and the Minister for Finance. When outstanding issues have been settled, the Minister for Finance and the Tánaiste will bring proposals to Government for detailed consideration and final decision. Following the Government's decision, it is expected that the legislation required for the establishment of the new authority would be promoted by the Minister for Finance in due course.
I would now like to proceed to the provisions in the Bill to facilitate making disclosure regulations. The prime objective in introducing these measures is to provide information to consumers to allow them to make rational and informed choices when purchasing insurance. This should lead to greater competition on the market, thus reducing the price of insurance. The proposed legislation provides for measures to strengthen and enhance existing consumer disclosure measures made under European legislation. The proposals will lead to a simplification in the future presentation of products. The new regulations will make any attempt at the mis-selling and churning of life assurance policies more obvious to the consumer and, therefore, more difficult to achieve. Thus the regulations will clarify the implications and costs involved in taking up life assurance products, including the payment received by the intermediary selling the product before the consumer signs along the dotted line.
In light of the changes proposed for the taxation system as it applies to life assurance which will come into effect from the beginning of next year, the disclosure regulations will remove any temptation to use the tax changes to churn exist ing products or to mis-sell new insurance products to unsuspecting consumers. Experience has shown that many purchasers of non-life insurance are equally at sea when it comes to understanding the precise nature of the product, its constituent elements and the price being charged. Enabling provisions relating to non-life insurance will provide for regulations to be introduced detailing elements such as policy loadings, restrictions, discounts, excesses, commission payments and any other amounts payable.
Some of these elements can have a significant effect on the cost of insurance cover and, in particular, the cost of compulsory motor insurance cover. The introduction of such transparency measures will assist consumers in controlling costs themselves and alleviate the unnecessary cost burdens that result from a lack of information at point of sale and-or renewal. As was the case with the drafting of the life assurance disclosure regulations, it is my intention to consult widely with both industry and consumer interests before finalising similar non-life disclosure regulations.
The Bill will provide a statutory framework for the introduction of regulations requiring the provision of information to insurance consumers, both before the conclusion of insurance contracts and on an ongoing basis thereafter.
Consumers will be entitled under the regulations to comprehensive information from the insurer or insurance intermediary on the terms and conditions of the proposed insurance policy, which will include the type of policy, benefits and options, "cooling off" provisions, purpose and intention of policy, the costs of the policy, the means and duration of the payment of premiums and the consequences of early surrender, which often had detrimental effects on consumers in the past.
Senators will be aware that in 1998 I abolished the cap on the commission paid to intermediaries. This was done for a number of reasons. First, there was a danger that other forms of payment might be devised to circumvent the maximum commission levels. Second, it was brought to my attention that other EU insurers might be deterred from entering the Irish market because of the cap on commissions. Since it is clearly in the interests of consumers to have as many insurers as possible active on the Irish market, in order that the best possible choice of product and price is available to them, I considered it important to abolish the cap.
However, although the removal of the cap has these advantages, it gives rise to the risk of an increase in commissions in the absence of other controls. In my opinion, the best control, in the context of a more competitive market, is disclosure and transparency for all consumers. Consequently, as part of this overall comprehensive disclosure package, I am proposing to introduce disclosure of insurance intermediary and sales persons' remuneration as a separate item of disclosure.
I will move on now to the reinsurance provisions contained in this Bill. Due to the absence of any direct consumer interest in reinsurance, the supervisory authority has imposed a light regulatory regime on this branch of the industry until now. At present, an informal system of authorisation of reinsurance companies operates in Ireland.
This is based on a simple statutory notification requirement and an administrative arrangement, whereby such companies will not be registered by the Companies Registration Office if the information in the statutory notification gives rise to concern. While the current informal system has worked satisfactorily to date, it is considered necessary to expand the requirements and to make provision for a more formal regime that could be introduced, if necessary, at short notice.
The position regarding reinsurance companies in Ireland has changed significantly in recent times, with the development, in particular, of the Irish Financial Services Centre. I intend to impose more stringent obligations on reinsurance companies to ensure the continuation of the excellent international reputation of the IFSC and the Irish financial services sector in general.
This Bill provides for the making of regulations that will require reinsurance companies registered in Ireland to provide detailed information to the Department of Enterprise, Trade and Employment at the time of their establishment, and to notify any changes in their situation on an annual basis. It also makes provision for the possible future extension to reinsurance companies of some or all of the provisions in national legislation governing the authorisation and supervision of insurance undertakings.
The main purpose of the new provisions is to prevent the registration or establishment in Ireland of reinsurance companies of dubious standing. We are also anticipating the introduction, in the medium term, of EU legislation on the regulation and supervision of the reinsurance industry.
For the same general reasons outlined above, this Bill removes the exemption of reinsurance contracts or insurance intermediaries solely engaged in reinsurance contracts from Part IV of that Act. Reinsurance contracts and reinsurance intermediaries will in the future be subject to all insurance legislation.
With regard to authorised officers, the revised provisions of the Bill in this area will apply to the Insurance Acts, 1909 to 1989, and, subsequently, to the proposed disclosure regulations to be made under the Bill. The provisions in the 1989 Act governing the appointment of authorised officers gave rise to concern when the Minister sought to use these provisions in the past. Questions were raised in regard to the appointment of authorised officers and the restricted manner within which they were required to carry out their tasks.
I have decided to update the provisions to address the concerns referred to previously and to bring them into line with the analogous provisions for authorised officers contained in the more recent Investment Intermediaries Act, 1995, and the Consumer Credit Act, 1995.
The more notable changes contained in the provisions are as follows: first, the Minister may appoint a person who is not an officer of the Department of Enterprise, Trade and Employment as an authorised officer; second, there is specific reference to persons in respect of whom powers may be exercised by an authorised officer; third, there are several new categories of information which will be open to the authorised officer to inspect; fourth, duties may be imposed on specified persons, for example, an examiner, liquidator, receiver etc., to provide information to the authorised officer; and, fifth, an authorised officer may be empowered by a court warrant to enter a private dwelling.
The various provisions covering offences and penalties of the Insurance Acts, 1909 to 1989, have been reviewed and updated on the basis of experience and other relevant factors. Some of these provisions date from as far back as the Insurance Act, 1936. The most significant changes are as follows: first, prosecutions for summary offences may be taken by the Minister; second, there is an extension of the timescale within which prosecutions can be commenced from six months to two years and beyond this period in specific circumstances; and, third, the Second Schedule to the 1989 Act, which sets out the amount of penalties that can be imposed by the courts, is being replaced by a new Schedule containing significant increases in penalties, which takes into account current money values and the financial situation of the country.
I will now turn to the Bill itself. In Part II, section 4 amends section 3 of the Insurance Act, 1989, by updating and increasing existing offences and penalties, respectively. Under current insurance legislation, the prosecution of offences is hampered by the six month prosecution deadline from the date of the offence. The section enables the Minister to bring summary proceedings for any offence under the Insurance Acts and insurance regulations at any time within two years from the date on which the offence was committed, or at any time within six months from the date on which sufficient evidence is available to justify proceedings, subject to a limitation period of five years from the date on which the offence was committed. This section also empowers the court to order persons convicted of an offence to pay the costs and expenses incurred by the Minister in relation to the investigation, detection and prosecution of the offence.
Sections 5 and 6 deal specifically with reinsurance. They expand the obligations on reinsurance undertakings contained in section 22 of the Insurance Act, 1989, and set out the various headings under which notification to the Depart ment of Enterprise, Trade and Employment is required.
Substantial amendments were made to this section on both Committee and Report Stages in the Dáil. The main change on Committee Stage sought to ensure that the provisions giving the Minister power to introduce full authorisation and supervision of reinsurance companies are constitutionally secure. The main change on Report Stage makes it clear that the requirement to provide notifications applies to existing companies writing reinsurance business. An amendment was also agreed which empowers the Minister to issue a direction to a company to cease reinsurance activities if the notification which it provides is deficient. The overall intent of the provisions regarding reinsurance is to prevent the establishment of reinsurance companies of doubtful reputation in Ireland. If, in spite of these provisions, companies of doubtful repute are established, the Minister may take administrative steps to deal with them. This is necessary to protect Irish and international consumers and to protect Ireland's outstanding reputation as a well regulated financial services centre.
Section 7 provides a firm legal base to introduce regulations on the provision of information to insurance consumers before, during and after the conclusion of insurance contracts. It covers disclosure, which is mandatory under EU law, and it sets out in precise terms the nature of the obligations that may be imposed by regulation on insurance undertakings and intermediaries, in so far as the mandatory provision of information to their clients is concerned. For added clarity, EU information requirements about the insurance undertaking and the commitment of clients are set out in a separate Schedule – Schedule II – to this Bill.
On Committee Stage, in light of representations made to me from various sources, I introduced an amendment which empowers me to require insurance companies to give annual information to consumers about investment policies, irrespective of when these policies were initiated. It is my intention, at least initially, to require this information in respect of policies initiated on or after 1 January 2001. However, should consumers experience difficulty in getting information about existing policies, I will consider extending annual disclosure to existing policies.
The members of the Oireachtas Committee on Enterprise and Small Business argued convincingly on Committee Stage that equivalence of disclosure as between commission payments to insurance intermediaries and sales remuneration to sales employees should be enshrined in this Bill. Accordingly, I brought forward an amendment on Report Stage in response to those arguments. Similarly, in response to good arguments on Committee Stage, I brought forward an amendment on Report Stage to provide for the monitoring of the disclosure provisions. It is my intention that the transparency regulations will come into operation with effect from 1 January 2001.
Section 8 provides for the repeal of Part IV of the Act of 1989. The essential elements of this Part will be replaced by the authorisation and supervision provisions in the amended Investment Intermediaries Act, 1995. Thus, insurance and investment intermediaries will be subject to a single regulatory regime, overseen by the Central Bank of Ireland.
Sections 9 and 10 deal with all the appointment and powers of authorised officers under the insurance Acts. Section 59 of the Act of 1989 is amended to provide for the appointment of authorised officers by the Minister, which appointments will not be restricted to officers of our Department. This will permit the appointment of authorised officers with the specific skills and qualifications necessary to carry out the particular task in question.
Section 10 expands the scope and powers of authorised officers. Experience has shown that the powers currently available to authorised officers were such as to hinder investigations into unauthorised insurance business and breaches of the Insurance Acts. Section 10 clarifies which entities are subject to the powers of an authorised officer and the actions that an authorised officer is empowered to carry out. Specific obligations on persons to whom this section applies to co-operate with an authorised officer are set out. A person who obstructs, misleads or fails to co-operate with an authorised officer in the exercise of his or her powers shall be guilty of an offence in the future.
Section 13 repeals section 110 of the Insurance Act, 1936. The provisions of this section, concerning time limits for the prosecution of offences, are revised and expanded in section 4 of this Bill. Section 14 provides for transitional provisions to apply to life assurance proposals and policies entered into before the commencement of section 6 – provision of information – of this Bill.
Part III brings me to the amendments to the Investment Intermediaries Act, 1995, an Act that is already administered and enforced by the Central Bank of Ireland. Section 16 amends section 2 of the 1995 Act to include definitions that are relevant to insurance. A number of amendments were agreed on Committee Stage, the purpose of which was to ensure that the Investment Intermediaries Act applied as intended and did not capture the activities of companies based in the International Financial Services Centre who are doing business in other countries whose domestic legislation will cover these activities. On Report Stage, I brought forward an amendment which amends the definition of credit institution. The previous definition was ambiguous in that it was not clear whether credit institutions would be required to seek authorisation as an investment business firm when acting as insurance intermediaries.
Section 17 inserts a new section 13A after section 13. Section 13A outlines transitional arrangements in relation to insurance intermediaries existing on the day before this section comes into effect. Provided that they apply to the supervisory authority, the Central Bank, for authorisation within a period of three months, these will "stand authorised" pending a decision from the supervisory authority. During the period in which the supervisory authority is considering an application for authorisation, it has the power to impose conditions and issue directions to the intermediary. An intermediary may appeal any such directions or conditions to the courts.
Section 18 amends section 16 of the Act of 1995 to provide that where the supervisory authority is not satisfied as to the probity and competence of a director or manager or as to the suitability of a qualifying shareholder of the investment business firm, it may apply to the court for an order revoking the authorisation of the investment business firm. Section 19 amends section 17 by removing the necessity for the supervisory authority to keep separately a register of investment business firms who are deemed authorised and those authorised by the supervisory authority.
Section 20 provides that where an investment business firm fails to give information sought by the supervisory authority within a reasonable period as specified, the supervisory authority may, by direction, impose punitive measures. This amendment was inserted on Committee Stage as the supervisory authority had recently, in some cases, experienced difficulties getting responses from some intermediaries.
Sections 21 and 22 define investment product intermediaries and the various types of insurance intermediaries. Section 21 presents section 25 of the 1995 Act in a more simple format. In addition, it includes insurance policies and tracker bonds in the list of products in respect of which a restricted activity investment product intermediary, RAIPI, may provide services. Section 22 amends section 25 of the 1995 Act by the insertion of new subsections outlining specific requirements for insurance intermediaries. Section 25A provides that an intermediary shall not place or attempt to place insurance otherwise than with an undertaking.
Sections 25B, 25C and 25D define the activities of a broker, agent and a tied agent. Section 25E defines the scope of agency in relation to insurance agents. It also governs the acceptance by an intermediary of insurance proposals. Where a premium is paid to an insurance intermediary in respect of a renewal of a policy invited by an insurer or is paid in respect of an accepted proposal of insurance, it is deemed to have been paid to the undertaking. Furthermore, it also provides that where a premium is paid to an insurance intermediary in respect of a renewal of a policy invited by an insurance undertaking or in respect of an accepted proposal of insurance, it is deemed to have been paid to the insurance undertaking.
On Report Stage I brought forward an amendment to section 26 which allows the supervisory authority to specify the type of information that should be given by intermediaries when first entering a business relationship with the client or on their stationery or advertisements. This will allow the supervisory authority to take account of the sometimes complex status of intermediaries while ensuring that the information to clients is absolutely clear and unambiguous.
Section 23 amends section 26(1) as amended by the Investor Compensation Act, 1998, by outlining the specific services that a restricted activity investment product intermediary may provide and by the addition of receiving and transmitting orders in tracker bonds and insurance policies to this list. Insurance undertakings are added to the list of bodies to which a RAIPI may transmit orders. Subsection (2)(a) provides that a person who is an insurance intermediary on the day prior to the coming into effect of section 15(c) and who remains within the definition of a RAIPI shall be deemed to be an authorised investment firm. Other than where acting as a deposit agent or a tied insurance agent, a RAIPI is not permitted to handle customers' cash.
An amendment was included on Committee State to provide a requirement that insurance intermediaries, who in accordance with the terms of the Act will be deemed authorised, will furnish information to the Central Bank within three months of the coming into force of the provisions of this Bill. The reason for the amendment was that the bank had experienced difficulties in getting information from a limited number of intermediaries who were "deemed authorised".
The issue of whether restricted activity investment product intermediaries should be permitted to handle cash in particular circumstances was raised on Committee and Report Stages by Members of the Opposition. I gave an undertaking on Report Stage in the Dáil that I would bring forward an amendment which would permit cash handling in closely defined circumstances. I wish to confirm my intention to table such an amendment on Committee Stage in this House.
Section 24 removes the provision in section 27 whereby a representative body approved by the supervisory authority would regulate its members. This section requires investment product intermediaries who are acting as insurance intermediaries to comply with the provisions of the insurance Acts. Allowance is also made for the supervisory authority to exempt certain classes of intermediary from the requirement to hold professional indemnity insurance where it considers that the clients of the intermediaries are otherwise adequately protected.
Section 25 provides for the substitution of the existing section 28(1) of the 1995 Act by a new text. This text simplifies the amendment of section 28(1) made under the Central Bank Act, 1997, and extends the obligations on product producers to insurance matters. The provision in section 28(1) whereby a product producer was permitted to appoint an investment product intermediary to act on its behalf, on the basis that the intermediary was a member of a representative body approved by the supervisory authority, is removed since the supervisory authority will be engaged in direct regulation itself and will no longer issue such approvals to representative bodies.
This section also amends section 28(2) by permitting a product producer to assume, for the purposes of section 28(1), that any investment product intermediary who has been authorised by the supervisory authority complies with the provisions of the Insurance Acts.
On Report Stage I brought forward an amendment to section 29 in place of previous provisions in the 1995 Act. The effect of the new provisions is to provide that the supervisory authority may decide the type of information to be provided by intermediaries to clients on their stationery, in advertisements, or on first contact. This is to take account of the sometimes complex status of intermediaries, while ensuring that the information to the client is absolutely clear and unambiguous. It will also permit the supervisory authority to adapt quickly to innovations on the market, notably those which may flow from e-commerce.
Section 27 amends section 30 to provide for the form of receipt to be issued by the intermediary to the client, the manner in which this form may be altered by the supervisory authority from time to time and the time period for which an intermediary must retain a record of the receipt. The requirements set out in this section may be augmented from time to time by codes of practice issued or approved by the supervisory authority under section 37 of the 1995 Act.
Section 28 as it now stands was inserted on Committee Stage. It provides that discontinuance notices are published where they can be expected to be seen by all clients of the intermediary. There have been cases where discontinuance notices have been published in newspapers where they would be unlikely to be seen by most of the clients affected.
Section 29 inserts a new section 31A exempting travel agents and tour operators from Part IV of the Investment Intermediaries Act. This is a similar provision to that which was included in Part IV of the Insurance Act, 1989. I have undertaken to examine this matter further and will revert to the matter on Committee Stage.
Section 30 excludes insurance intermediaries from the requirement in the 1995 Act to disclose commissions since they will have to disclose commission payments under this Act.
Section 31 repeals section 51(5)(e) of the 1995 Act, which provided that a single bond may cover the bonding obligations of an investment business firm that is also an insurance intermediary. Since insurance intermediaries are now included within the definition of investment intermediaries, and in any event the requirement to hold a bond under the Insurance Act, 1989, was repealed by the Investor Compensation Act, 1998, this subsection is no longer necessary.
Section 32 amends section 2(g) by the insertion after the word “by” of the word “whom”. This was a technical amendment necessitated by the omission of “whom” in the original text of this Act.
Section 33 amends section 74(2) by expanding the section to include certain information provision requirements for persons acting as insurance intermediaries or insurance agents, the format of which information may be modified by the supervisory authority, within the remit of section 74(1). In other words account is being taken of changes in society, commerce, business and the economy, allowing the supervisory authority to react at any time by making the necessary, sensible, practical changes in the interests of the consumer and of sustainable business.
Section 34 was introduced on Committee Stage. It will enable the Central Bank to make inquires of accountancy bodies about the investment business activities of any of their members. The current position restricts inquiries to "certified", that is authorised, persons. The amendments permit the Central Bank to discuss the activities of accountants who are engaging in business activities without the necessary authorisation. It also allows the supervisory authority to seek from a product producer information about an investment business firm with whom they have a business relationship and disclose that information to the Garda, notwithstanding normal confidentiality rules.
That is a summary of the Insurance Bill, 1999. In the course of preparation of the Bill over the past two years, our excellent officials and I have met with a broad range of interest groups who have represented the interests of the industry bodies concerned and insurance consumers.
These have included the Irish Insurance Federation, the Irish Brokers Association, the Professional Insurance Brokers Association, the Insurance Intermediaries Compliance Board, the Society of Actuaries, the Consumers Association of Ireland, the Pensions Board, the Director of Consumer Affairs and, of course, the Central Bank of Ireland, which will be taking over responsibility for the regulation of insurance intermediaries. Altogether, we have had a number of separate meetings with representative groups from the insurance industry. Our officials also provided a presentation in November 1999 on the broad outline of the Bill to the Joint Committee on Enterprise and Small Business. I have been signalling these changes since October 1997, so they do not come as a surprise to anybody.
I sincerely thank the various interest groups which have furnished their opinions to me and our officials during the consultation process and, in doing so, contributed to the final outcome of the Bill.
Senators will be aware that the cost of insurance, especially motor insurance, is a topic which generates much debate and concern. Premiums for motor insurance arise directly from the high incidence of claims, especially among certain age groups, and the high cost of claims settlements. My colleague, the Minister of State, Deputy Molloy, has initiated a campaign to improve road safety this coming bank holiday weekend. The National Safety Council is inviting motorists to switch on their headlights during daylight hours over the weekend, as a gesture of solidarity in favour of road safety. Senators will recall that the "fly the flag" campaign during the same weekend last year resulted in a significant improvement in road safety in November. I commend the campaign of the Minister of State, Deputy Molloy, to this House and I hope the motoring public will take this opportunity to be proactive in support of road safety in Ireland. A significant lessening in the number of accidents over the already better record of last November would be the best possible result for the people.
I sincerely thank the Seanad for its co-operation in arranging this Second Stage debate. I look forward to hearing the contributions of all Senators. I commend the Bill to the House and look forward to participating in the subsequent Stages.
