Reports on Motor Insurance Costs: Statements

I very much welcome the opportunity to address Seanad Éireann this evening on the cost of insurance working group's Report on the Cost of Motor Insurance, which was published in January and on which implementation has already commenced. I will also refer to the Report on the Rising Costs of Motor Insurance of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach in my address, which covers similar ground to the working group's report.

As everybody here is aware, the cost of motor insurance is an important issue that has had a significant impact on society as a whole. Throughout the country people have been paying significantly higher premiums for insuring their motor vehicles and many are struggling to afford what is, after all, an essential requirement for day-to-day living.

I take this opportunity to again acknowledge the work on motor insurance undertaken by the Oireachtas joint committee chaired by Deputy McGuinness. There are considerable overlaps between our respective reports, which ultimately share the same basic aim of delivering fairer insurance premiums for all consumers. On some issues, the recommendations in the Oireachtas joint committee's report are almost identical to those contained in the Report on the Cost of Motor Insurance; for instance, in providing more information to consumers regarding the breakdown of premiums and reasons for large increases, ensuring that the use of pre-action protocols is extended to personal injury cases and establishing the Personal Injuries Commission. In addition, there are further recommendations in the two reports which are broadly aligned such as recommendations to establish fully functional databases relating to both uninsured drivers and insurance fraud and to expedite the development of the master licence record. Therefore, in implementing the cost of insurance working group's report recommendations, a process already well under way, we will address many of the recommendations contained in the Oireachtas joint committee's report.

Essentially, there are five to six key priority reforms that I believe need to be made to improve the functioning of our motor insurance market. The cost of insurance working group report contains 33 recommendations, with 71 action points, which present a roadmap to achieving these reforms - one can see how we will get there, when and who is responsible. I will outline the key aspects in detail, as well as providing updates on the work already done. One of the key findings of the working group's report is the need to enhance transparency and facilitate the use of data sharing and collection to the level that we see in other jurisdictions. This was a common theme which arose in discussions with a wide range of stakeholders and is a matter which needs to be addressed. Currently in Ireland, claims data related to motor insurance are available from a variety of sources. However, no organisation is currently responsible for the collection of data from insurers for the purposes of improving transparency on emerging risks within the market, thus representing a clear information gap.

Pricing of insurance premiums reflects a current view on the likelihood and cost of claims into the future. Transparency of claims data could feed into insurers' current view of future risks, thereby improving their ability to price more accurately and reducing the cyclicality of their pricing. The working group has developed a phased approach to progress this matter. In the short term, it recommends commencing the publication on a quarterly basis of a number of key aggregated claims-related metrics to be provided by the insurance sector. A subgroup formed in order to progress the implementation of this recommendation has met on six occasions to date and a request for data will issue to insurance undertakings before the end of this month for completion. The metrics will then be published for the first time at the end of the second quarter of this year. This publication of initial metrics will act as a stepping stone to the establishment of a national claims information database by the middle of 2018, which will provide more detailed claims information and, therefore, should lead to better quality in-depth data analysis.

The Central Bank will hold this database.

It is expected that the national claims information database will provide data on what claims are being made against property or for personal injuries, the legal and other costs that are being incurred, as well as the channel of resolution and what impact that has on the final settlement, among other things. It should assist in identifying emerging risks in the market relating to claims, trends and costs, for example. The information will be collected and stored at an aggregate level.

The second area where data availability is a live issue is in the field of uninsured driving. Figures from the Motor Insurers Bureau of Ireland, MIBI, show that the level of uninsured driving in Ireland rose from less than 5% in 2013 to 7.1% in 2015. The bureau is responsible for meeting the claims of those who have been in a collision involving an uninsured or untraceable driver. It pays out approximately €50 million to €60 million annually to meet such claims and this cost is passed directly to motorists. The insurance industry estimates that this adds about €30 to each motorist’s premium. It is imperative, therefore, that we tackle this issue without delay. The working group has recommended the establishment of a fully-functioning database to identify uninsured drivers to enable gardaí to check motor insurance compliance effectively. A project group has been established between the MIBI and Insurance Ireland to create a central database which will contain information required by the Road Traffic Act 2016, such as the driving licence number and policy number of each insurance policyholder. The ultimate aim is to provide An Garda Síochána with a mobile app, on an authorised user basis, to allow for roadside access to the database. The report sets a deadline of quarter 3 of this year for the database to go live vis-à-vis privately owned vehicles.

Fraud, like uninsured driving, has been highlighted as an area where the availability of more quality information can lead to a reduction in its negative impact on the cost of premiums. While the vast majority of claims are genuine, there is a public perception that insurance fraud is a victimless crime. However, nothing could be further from the truth and fraudulent claims, whether of an opportunistic and exaggerated nature or facilitated by highly-organised crime rings, need to be made as difficult as possible to get away with. In this regard, the insurance industry has estimated that fraud costs it in the region of €200 million each year, adding approximately €50 to each premium. To deal with this problem, the report recommends the establishment of a fully-functioning integrated insurance fraud database by the end of next year to enable the industry to detect patterns of fraud. It is likely to be modelled on an equivalent UK system and will be funded by industry but managed by an independent not-for-profit body. This will be progressed in tandem with actions to ensure any data protection issues are appropriately addressed.

Another core recommendation is the establishment of a personal injuries commission to investigate and make recommendations on processes in other jurisdictions which could enhance the claims process in Ireland. The terms of reference for that commission are set out in the report and they include the commissioning of medical research, bench marking of international awards for personal injury cases, analysing and reporting on international compensation levels and compensation mechanisms and reporting on systems where detailed grading of minor personal injuries is in operation. The need to begin this work immediately has been recognised by Government and on 10 January, the former President of the High Court, Mr. Justice Nicholas Kearns, was appointed as chairperson of the commission. The other members are stakeholder representatives from the medical, legal and insurance sectors as well as relevant Government Departments and agencies. The commission met for the first time on 10 February and has agreed a work plan. The second meeting took place on 3 March, with the next one scheduled for 7 April.

While the aforementioned measures could be seen as the core recommendations, the report should be seen as a package of reforms which, when implemented together, will provide for greater stability in the pricing of motor insurance and help to prevent the volatility that we have seen in the market in recent times. In this regard, another bundle of measures addresses the issue of protecting the consumer through, for example, the extension of the current renewal notification timeframe by five working days. Additionally, the Department of Finance is working with Insurance Ireland to develop protocols to require insurers to set out reasons for large increases in premiums and to assist returning emigrants by requiring insurers to accept driving experience from abroad where a person has previous driving experience in Ireland. Another part of the recommendations centres on reducing costs in the claims process in tandem with the running of the personal injuries commission. These actions will seek to maximise the usefulness of the Personal Injuries Assessment Board, PIAB, and to improve the book of quantum. Further reviews will also take place to examine the impact of the changes in the court jurisdictional limits, the setting of the discount rate in personal injury lump sum awards and the introduction of periodic payment orders.

The implementation of the recommendations of the review of the motor insurance compensation framework is also ongoing as we speak, with heads of a Bill to be brought to Government by the second quarter of this year. Actions have also been recommended to develop a protocol requiring insurers to seek proof of an up-to-date national car test, NCT, or certificate of roadworthiness and to promote compliance with road safety legislation. Insurance Ireland will also present the working group with a report on the use of telematics in Ireland by the end of the year.

I appreciate being given the opportunity to discuss the important objective of reducing the cost of motor insurance and I look forward to hearing the comments of Senators here today. It should be noted that the ongoing progress of the working group can be followed through the quarterly updates which will be published on the Department’s website from quarter two. I have also provided the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach with an initial progress report following my recent appearance before it and this has been published. While I have said on a number of occasions that there is no single simple method to immediately stem or reverse premium price rises, I believe that with the effective and timely implementation of these reforms and with high levels of co-operation and commitment from all stakeholders, we can create a more accessible market which can deliver fairer premiums for consumers without unnecessary delay. We can achieve this for the consumer while also protecting the stability of the insurance market.

I welcome the opportunity to debate the report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on the rising cost of motor insurance and the report of the working group on same. Almost immediately following the establishment of the aforementioned Oireachtas committee last June, the unsustainable rising cost of motor insurance was identified as an urgent issue for the committee’s attention. I serve as Vice Chairman of that committee and it is fair to say that the Chairman, Deputy McGuinness, and its members, including Senator Kieran O'Donnell and others, did a lot of in-depth work on the issue of motor insurance. The committee engaged with many different stakeholders over many meetings and produced a very good report last November, much of which dovetails with the Minister of State's working group report.

The rising costs of insurance were confirmed by CSO figures which, over a three year cycle, showed increases of up to 70%, with many consumers experiencing even higher increases. We all know that the rising cost of motor insurance continues to have a very negative impact on Irish society. We also know that this rate of price increase is not sustainable and, in the opinion of the Oireachtas committee, not justified. The cost of motor insurance poses a risk to national competitiveness and the performance of the overall economy at a time where the country is facing other serious challenges which are beyond our direct control, including the possible impacts of the US Government's policies on foreign direct investment, FDI, and of Brexit. The high cost of motor insurance - and insurance generally, which we are not discussing today but which is being discussed by the Oireachtas Committee - must be tackled.

As one of its first tasks, the joint committee undertook to examine and establish the underlying factors contributing to the rising costs of motor insurance and to make recommendations to reverse this trend. The committee held a series of public hearings on the matter. As Vice Chairman, and on behalf of the joint committee, I would like to thank all the witnesses who came before the committee and for their respective contributions. I also wish to thank the wider public, many of whom contacted the committee and supplied submissions on this issue. This evidence gave the committee valuable information and insight on this very critical issue which impacts directly on Irish citizens and businesses.

The importance of the public nature of the committee hearings cannot be overstated. It meant that members of the public could hear first-hand from the main players and draw their own conclusions. It is the job of public representatives to represent citizens and during these hearings the committee heard, time and again, of the impact on citizens of the rising cost of motor insurance, with young and older drivers feeling particularly targeted. The committee heard that other safe drivers had also experienced inexplicable price increases which were completely unrelated to their driving records. My experience, and doubtless that of many of the other committee members, was one of frustration at the end of the public hearings on this issue. Having reviewed extensive documentation and heard from a range of perspectives, the committee identified many factors as contributing to the huge price increases in insurance premiums, such as the frequency and cost of claims, fraud, operating losses of insurers, legal and regulatory factors, including insolvency issues, and the need to reform the PIAB. However, it remains my opinion that another critical factor is the lack of transparency of and access to insurance data, particularly data on claims.

The committee repeatedly heard that 10% of claims end up in court, 20% are adjudicated through the PIAB and the remainder are never seen by anyone other than the insurance companies and individual claimants. The committee also discovered that there had been no significant increase in the cost of the claims paid out by the courts or the PIAB. Therefore, we have to believe, on the basis of what we heard from the insurance companies and in the absence of any independent method of measurement, that all of the increase in premiums relates to the 70% of claims that are settled outside of the formal settlement systems. We also heard about losses incurred by the insurance companies in the past, solvency ratio changes, administrative inefficiencies and so forth. The lack of transparency and of access to insurance data is absolutely critical and must be dealt with properly.

In that context, I welcome the speech from the Minister of State, Deputy Eoghan Murphy. I also welcome the time he has devoted to this issue. The Minister of State is a man of great integrity who is doing his very best on this issue.

I can speak from personal experience. The Minister of State might be lucky in that my insurance policy was up for renewal. The premium went from €390 to €520 last year, an increase of exactly one third. It had increased from €330 to €390 the year before and was below €300 the year before that. This year it came in at €820. That quote was for the same car and driver with no claims or penalty points. I managed to get it back down to €580 after discussing it with the insurance company, but it is still an iincrease of more than 10%. However, it is not the €300 increase that it would have been otherwise. If I am seeing these increases, I imagine many other consumers are too.

This issue is urgent. It is all well and good to say we do not want to have water charges or increases in property tax. However, these increases are major and affect people on a daily basis. They are far greater than any being suggested in the television licence fee or water charges, if we had to pay them. They need to be tackled at an aggregate level. We need to understand what is going on.

I am Vice Chairman of the Joint Committee on Public Expenditure and Reform, and Taoiseach. The committee made 71 recommendations, far too many to outline in detail in the two minutes I have left. While some of them would be relatively easy to implement, others would require detailed consideration. Greater transparency is crucial. We have recommended that the insurance industry gives raw data and that the Government collect them. The Minister of State alluded to how a database would be set up and managed. I hope that over time it will show us the blips and the issues that need to be tackled. I also hope it will encourage new competition. We hear that competitors have no wish to come here because the market is too unpredictable. They believe they would be paying for the losses of companies that folded and so on. That issue needs to be looked at.

The report also recommends the greater sharing of data between the insurance industry and the various statutory agencies. It recommends that consumers receive greater detail in renewal documents. An increase in the powers of the Personal Injuries Assessment Board is important. We talk about the book of quantum being important, but we need to understand it is simply an historical document reflecting what has been paid out. It should not be a target in the sense of future claims being the same as previous ones. We have heard much about the change in the discount rate. Equally, we have heard of solvency ratios. Customers need to understand why their premiums are going up. However, they do not and cannot because the documents simply state what the premium was and what it will be. We need to understand why. I realise this is not within the remit of the Minister of State. Apparently, road safety was not within the remit of the Minister for Transport, Tourism and Sport when he was before the House. Road safety and the enforcement of existing rules need to be dealt with, although I realise they are matters for the Department of Justice and Equality. People need to know. If there are fewer and less severe claims, there should be smaller pay-outs. That is basic mathematics. We need to ensure people are driving more effectively, whether by way of putting alco-locks on the cars of those who have been convicted of drink driving, tachographs in ordinary cars to track what the drivers are doing or using similar technology. I imagine technology to track people while driving is already in existence. It simply needs to be used.

I hope our report can contribute to reform of the motor insurance sector. We have engaged with the Minister of State. It is important that the Minister come back to the committee on a quarterly basis to discuss and tease out what is happening. This is a vital issue. I was the person who requested that the matter be debated in this Chamber because it had been discussed in the other Chamber on the day the Department's report was published. It is important to have this debate. I look forward to working with the Minister of State, his officials and the committee to try to ensure insurance premiums will not simply stay the same but fall over time. They should fall because less is being paid out.

I welcome the Minister of State, Deputy Eoghan Murphy, and compliment him on the work he has done in this area. There are two reports on the issue, the first of which is the report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. The Minister of State also produced a report for his Department. Many of the points we had raised fed into the final document produced by the Department.

It goes without says this problem has some key features. First, we really do not know what happens with 70% of claims since they are settled outside the courts and the Personal Injuries Assessment Board. Second, there is no database. Certain insurance companies have internal databases that they use, but there is no transparent public database to allow people to see exactly how premiums are arrived at or how risks are factored into premiums. The book of quantum needs to be updated far more.

I note one feature that we found when we worked on the report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. I note that the clerk to the committee is in the Visitors Gallery. The myth was that the only reason motor insurance premiums were increasing was the making of exorbitant awards and legal fees. That was the sole reason proffered, but we found, when we drilled down, that this was not the case. Are these factors? Yes, they are. Are they the primary factors? No, they are not. The report makes for interesting reading. It found that the appeals court had been established to enable insurance companies to appeal to a higher court. In essence, a special court was set up and, effectively, the associated rulings formed precedents. We found that in the previous six or 12 months, awards were for significantly smaller amounts than those granted in the courts, yet there was no correlation in a fall in motor insurance premiums. The insurance companies maintained that the size of awards and legal fees were the primary contributory factors. However, that was not borne out by the empirical evidence during the previous six or 12 months. In many cases, routine awards were falling by one half. I did some forensic work on the matter. That was something about which I felt strongly.

I made a presentation at the Limerick Seniors Forum a week ago. It had organised a seminar for older people on the motor insurance industry. I had to read through the reports and look at the up-to-date position. They made for interesting reading and the feedback from the older age groups was interesting. I am referring to them as older age groups rather than in any other way.

A feature of the industry is how the industry players are shifting the goal posts once again. The danger is that this is what they will continue to do. Two particular cases stand out. A man had a claim against his insurance policy approximately two years ago. His premiums went up marginally in the past two years. However, this year in the initial quote it went from €500 to €1,300. He was operating through a broker who eventually got the figure down to €1,100 with the same company. I decided to do some forensic work. We went through all of the insurance company websites to see whether we could find a lower quote. The answer is that, systematically, all of the quotes were higher. We went directly to the company with which the man in question was insured and found that it was charging a premium far higher than the broker was quoting.

A second person came to me in recent days. Their premium had jumped to an alarming level over a year ago, almost to €1,800. Companies are now finding ways to do this. The Competition and Consumer Protection Commission is examining cartels in the motor insurance industry. A person made a claim over two years ago and it had relatively little impact on his premium in the past two years. Suddenly, this year the quote from his existing company, through the broker, was by far the cheapest of the quotes received. The only company with which he could be insured was his existing company, but it was jacking up the rate. However, it was jacking it up at a lower rate than other companies. Why was that? We need to look under the bonnet to find out what is going on. This issue is extremely urgent. Whatever is required, whether it be legislation or other measures, we need to fast-track it to force motor insurance companies to provide a publicy available database that will be under the control of the Central Bank.

It can be on a no names basis, but they must give a number and the reason for the quote. How can an insurance company justify the premium of an individual who had an unblemished record all his life until a car accident over two years ago going up in the normal way following the accident but suddenly in the third year going sky high? The question that has to be asked is why he cannot get motor insurance from any company bar his existing company which is charging an exorbitant rate. The only way we will address that is to prevent all insurance companies from issuing a motor insurance policy until they release the details of every single motor insurance policy they issue. If that was done, it would bring some level of reason. My worry is that when they cannot blame it, they are going to go after the soft targets. Motor insurance is the only obligatory insurance.

The empirical evidence shows that insurance companies are not getting with the programme in terms of providing transparency and reasonably affordable motor insurance policy premiums.

I will first talk about the issue of databases in insurance in general and in the motor insurance industry. It is nonsensical to think there is not a database. The only problem is we do not have access to it. The insurance companies have been sharing information for as long as I can remember.

I am particularly aware of a public house that burned down in Dublin in the 1960s and the insurance company refused to pay out because the proprietor of that house had not declared a sofa burn from a cigarette in his own house. That was with a separate insurance company but they were able to get their hands on it. In the end, the broker paid out a fortune in that case.

Insurance companies have been sharing information for years. The only thing we need to do is to force them to put that information into the public domain. We need to stop this nonsense.

I feel a bit of a fraud standing here listening to the sort of figures that have been bandied about this year. I paid €320 for my insurance for a two-litre car and my wife pays €315 for hers.

The Senator might tell us the insurance company.

It goes back to something Senator O'Donnell said. My broker gets me a fantastic price every year. My broker gets me a fantastic price because I am a teacher.

The Senator might tell us his name.

If I were buying health insurance in the morning and I were not a teacher, I could still buy the teacher's policy.

I would say the broker is texting the Senator to make his name known.

No, I will not name him. If one goes to buy health insurance in the morning, one can pick any specific grouping that has a special deal and decide to be part of that. Why is it not possible to do the same with car insurance? We hear of youngsters who buy cars for €2,000 and are asked to pay €5,000 insurance. We then ask ourselves why there are uninsured drivers on the road?

I heard a very interesting debate recently about an apprentice whose mother was complaining that he could not drive alone on his provisional licence and he had a long way to go to work. I understand the problem but I do not agree with her point. The bottom line is that a learner driver should not be in a car on their own. Where learner drivers or uninsured drivers are found on the road in their cars, the car is a lethal weapon and should be taken off them on the spot. That would cause problems in rural Ireland but those problems are nothing to the problems of a family who lose a loved one because an inexperienced driver takes a corner too fast or because a car crashes, killing the driver.

I accept Senator O'Donnell's point on legal fees. However, we must also be aware that many, many clients when they go to a solicitor - not all solicitors, I hasten to add - to represent them at the Personal Injuries Assessment Board, PIAB, are told that the solicitor can get them a better award. This leads to the nonsensical four and five year delays where the client of the solicitor and the insurance company engage a plethora of medical professionals to carry out medical assessments maybe ten times between the time the claim is lodged and the time the claim is settled. However, 70% of claims are settled without ever going inside the door of a court. It is time we stopped the nonsense. There is no reason a personal injuries claim cannot be settled within a year if the parties to it are going to settle.

I recall an organisation down in Senator O'Donnell's country that sent a letter to every solicitor within a 100 mile radius and told them that if a solicitor took on a no foal, no fee case against that organisation, it would fight that solicitor to the Supreme Court if necessary. This killed off all the nonsensical claims overnight because nobody was prepared to chance bringing a no foal, no fee case all the way to the Supreme Court. One had to be damn sure of one's grounds before taking such a case.

There are spurious claims and they need to be weeded out. In the case of those who are genuinely injured, however, we need to expedite the claims process to get them whatever compensation they need. Compensation is not paid out willy-nilly in this country. People have to prove their case. The notion that one has to wait four years to do it does not make sense. If somebody goes to the PIAB, the board values his or her injury at €20,000, the claimant goes to court and is offered less than that, then that is what he or she gets. A very strong case would have to be made - I do not wish to tie the hands of the Judiciary - to get a valuation higher than the PIAB award.

I am delighted to see the appeals system is in place. I agree with Senator O'Donnell that the appeals system has not resulted in reduced policy figures. That is something that we need to look at.

I will finish on the issue of social responsibility. This morning I brought up the issue of first responders who act as first aiders in rural Ireland. The first case that arose was in Donegal. First responders were informed by their car insurance company that if they are using their car to respond to an emergency call out, they are not insured. To cover emergency call-outs, the insurance company looked for a premium on top of the premium. That is just milking the system. These people are prepared to give up their time voluntarily to their community by, for example, bringing a defibrillator to a person lying on the street. All of a sudden they are going to have to pay a price for it.

That caused me to look into the situation with regard to county councillors doing their duties. A county councillor may very well find that he or she is not covered if he or she has an accident. If that councillor explains that he or she is a county councillor and was en route to visit a constituent in Bruff when the accident occurred, the insurance company can claim that the councillor was not on private business in his or her private car but rather was on a business trip and should have informed the insurance company of this.

They could have been going to Lough Gur as well, which is on the way.

They could have been going to Lough Gur. We need to sort this out. Why is this happening? If it is the case, we need the insurance companies to come clean now and give us a list of those people who operate in areas like county councils, emergency response or voluntary football teams and tell us whether those people need to declare that when they are writing their policy. We do not want people to be penalised for doing public service.

I congratulate the Minister of State. When he took office and this issue arose he did not shirk his responsibility. He got stuck in straight away and that took some guts. I admire him for that. I wish him the very best. He is up against a cartel, one of the most powerful cartels this country has ever had. It will take a lot to break it. I believe the Minister of State is the man to do it and I wish him the very best.

In the Minister of State's remarks to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach last November, he set himself a high standard for a report that would not lie idle on the shelf of the Department but would be implemented in time. He said that he was prepared to put pressure on those who were holding up progress or refusing to co-operate. It is worthwhile to quote at length from what he said:

There is absolutely no point in this committee or the working group publishing reports if we do not have a detailed timeline around it. I have met the insurance companies and Insurance Ireland on this and have said to them that we are going to come with an ambitious and a detailed timeline for the implementation of every single recommendation we put forward. We want to show a determination that we are serious about this to all the players in the market. That is why when I talk about it, and I hope the committee sees this, and when we come to publish the working group's report with the detailed timeline reflecting all the good work done by the Oireachtas committee and in showing the determination to get things done and to take action, it will have a calming influence on the recent spikes we have seen in the cost of motor insurance premiums.

Sinn Féin believes that the problem with this report and the implementation of the recommendations is that the onus is placed almost entirely on the industry. This is the same industry that is responsible for the unexplained and reckless 50% increases in premiums. It is the same industry that my colleagues spent many weeks questioning and cross-examining at the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach in order to get answers. I have heard from a colleague that her insurance premium has gone up €800 in four years, all of which were no-claim years. She has held her licence for six years. I know of a person who saw a 50% increase, once again without any explanation given. Premiums that rise without any documented explanation annoy people the most and leave them fearful of the next quotation from their insurers. The report from the finance committee stresses that this matter simply must be tackled head-on. When he appeared before the committee, the Minister of State said that this issue is being dealt with by an implementation committee nominated by insurance company CEOs. The very people who hiked insurance premiums are to sit around and decide if they did a bad thing in increasing their profits. Even if, as is claimed, the CSO figures show a balancing off of increases, we are still left with a net 50% increase.

Another example of how this report defers to the industry is the proposal in recommendation 26 that the insurance industry should actually fund a section of An Garda Síochána. I can understand the intention and one could argue that if there are major sporting or community events, they have to provide a contribution towards that. What is being put forward, however, is something different. It is a specialised and dedicated insurance fraud unit in An Garda Síochána that would be funded by the industry. This is not a contribution to the policing of a community event. This measure would basically define those who are policing an event as a Garda insurance squad and the insurance industry would pay their wages. I believe this to be a risky concept. I can understand the sentiment behind it, which is to question whether the insurance sector should make a contribution or pay a levy. When one has that type of direct engagement between members of An Garda Síochána and the industry that pays them, it is quite risky and we should stop to consider what precedent is being set. A freedom of information request my colleague, Deputy Pearse Doherty, produced evidence that in August 2015 the Governor of the Central Bank was writing to the Minister for Finance pointing out that a number of non-life insurance companies had taken a very optimistic view of the future economic outIook, had built up an unsustainable overhead and had followed an imprudent pricing and underwriting approach. In other words, the industry made mistakes leaving itself exposed to shocks. In an age of 0% interest rates, the old model of relying on returns from investments and bonds has failed them and us. Of course, fraud, extra regulation and other factors contribute to the price of a premium. The question is how much have these factors changed. The answer seems to be very little. The answer to why premiums have increased cannot be put down to these static factors.

Many of the solutions put forward by the industry are either pure distractions or completely unworkable. Those in the industry willingly spin the need for the book of quantum to reflect international norms. They know well that the book of quantum is merely a factual record of awards given. It cannot it be made fit a certain narrative because the industry is uncomfortable with the facts. Most brazenly of all, the insurers are still not prepared to accept that they have been less than transparent. Backroom deals, unrecorded awards and a lack of information to consumers suits only one side, namely, the insurers. Expert after expert has homed in on the lack of data and transparency as the key to bringing down prices. Home, flood and health insurance are all now rising beyond inflation. Motor insurance in the State is compulsory for all drivers. A private industry that is being investigated for anti-competitive practices cannot dismiss the anger relating to and the social and economic effects of their decisions and mistakes.

I welcome the Minister of State and I welcome the report and its recommendations. The key issue now is in its implementation. I do not know if the recommendations go far enough. If we go to the bone on this issue, we know that it is compulsory to have motor insurance so what greater business is there to be in, selling a product which is compulsory for consumers to buy? The insurers can name their price. This, in my opinion, is the root of the problem. As Senator Craughwell said, there is a cartel in operation.

Much of the information that has come forward regarding databases and the lack of information is a fallacy. The State has improved conditions for insurance companies hand over fist in recent times. We introduced the penalty points system, which is a check-and-balance system for the insurance companies each year in respect of the renewal of insurance policies in the context of the quality of drivers. This has not helped. It should have been an ideal guide for the companies. I do not believe that anybody would argue over an increase in cost of an insurance policy because of penalty points, etc. This measure, however, has not had an effect.

Over 40 years ago, we put people on the moon. Today, a person cannot tax his or her car unless he or she quotes an insurance policy number. Every car in the State is registered by vehicle registration so that a computer can tell us when our motor tax is due. That computer can also tell if a person has not taxed his or her car and a red light goes on if the car is not taxed. If it is taxed, then a person has an insurance policy number so that it is insured. If it is taxed with an invalid insurance policy number, another red light should light up somewhere that this car is not insured. All of these computers have the ability to talk to one another. That is joined-up thinking. As Senator Craughwell quite rightly stated, insurance companies are sharing information and have been doing so for a long time. I shall give an example. I am involved with the National Ploughing Association. A man who was partaking bought an old second-hand tractor for competition ploughing in Northern Ireland. It was never going to be on the road and was just for use in competitions on private lands. He did not register the tractor in Ireland but he did obtain a third-party insurance policy for fear of injuring somebody during an event. He received a letter from Revenue six months later saying that it knew he had the tractor and that it was not registered in Ireland. Where did Revenue get that information? It was because he insured the tractor. Who was sharing that information and what database is there? We need to dig much deeper into this matter. There is nothing in the recommendations that would help to reduce the price of insurance for a young driver next year who may have been quoted up to €5,000 for insurance cover on a car valued at €2,000 or €3,000. I do not see anything in the recommendations for that person. The two figures quoted so far as the reasons for increases are an average breakdown of €30 per policy for uninsured drivers and an average of €50 for exorbitant claims. That is €80, which is 10% of an €800 policy. This would mean that a quotation on the same policy next year would be €880 - not €4,800. While I welcome the recommendations, I would look monitor very closely how they are implemented and what results are forthcoming. There is a lot more to be done to get to the root of the problem, which is cartel-driven pricing.

I welcome the Minister of State and I congratulate him. I commend the fact that he has really grasped this issue. He is making it a big priority in his Ministry and I wish him well with that. Despite competing commitments at home, I stayed on to contribute to this debate because I wanted to say this to the Minister of State and also because this issue is of huge importance to the people in the constituency in which I live, which does not have a rail service, just an effective bus route on the N3. In most of County Cavan and County Monaghan, people have no alternative but to use their cars to go to work, school and on social outings.

The cost of motor insurance is more than a casual matter in that kind of environment. I have a point that I might discuss privately with the Minister of State. There has been a huge hike in public liability insurance for business people. I came across a case of a small retailer where the cost increased from €1,800 to €3,300. This is happening across the board. That is not what we are here for. We are here to discuss motor insurance. I commend the Minister of State's work.

Of course, it is important to eliminate fraud. The Minister of State has identified fraud as costing €250 million per year, which is very significant. As Senator Craughwell said, the core of a database does exist but a database of claims is critically important. The insurance companies concede fraudulent small claims rather than confront them because of the cost of doing so. It is cumulative. The Minister of State will have to talk to the companies and they will have to stress test and challenge many claims for a while until the culture changes. I know many cases of this. I am aware of one scenario where a person puts in what can only be described as a spurious claim for tissue injury or minor injuries and that claim is conceded because it costs €7,000 or €8,000 to do so whereas it would cost far more to challenge it. A figure of €10,000 settles it and those instances of €10,000 being paid accumulate. Confrontation and stress testing are needed here. I commend this course to the Minister of State to see what he can do in this respect.

It has been said earlier that settling on the court steps years after an accumulation of costs is not a satisfactory modus operandi and the Minister of State needs to deal with this. The company either concedes early on or fights it to the very end. This must happen. If companies are serious about their contention that fraudulent claims are an issue, they must be consistent and stay with this.

The issue of uninsured drivers is significant. It is a chicken and egg situation. I can tell the Minister about many youngsters in my area who, sadly, are pushed into being uninsured drivers, a situation I do not condone, because of the gigantic cost of insured driving and the necessity of driving. It is not an acceptable position but it is almost like the children in Fagin's group in Oliver Twist who steal. They do not have another option in some instances but it is not acceptable. We must look at the way we deal with uninsured drivers. I take the Minister of State's point that technology should be fit to produce a consistent database.

The Central Bank needs to introduce more control. I wonder whether insurance companies hold an awful lot of trophy offices in very upmarket parts of cities and towns, whether these companies are wasting money in other spheres and whether there is a lot of nonsense here. The Central Bank has a role to play here. I would like the Minister of State to challenge the insurance companies about where our money is going. It is not just about fraudulent claims and uninsured drivers.

The question of legal fees obviously arises. I know it has been said that they are not the factor they were thought to be but they must be a consideration and they need constant monitoring. I commend what the Minister of State is doing. He needs to keep battling in the areas of claims, the immediate concession of claims, uninsured drivers and the cost of claims. It is a well-travelled area but it is important that this work is done.

I would welcome it if the Minister of State agreed to come to this House possibly three times a year to update us because this issue matters. People want to know what we are doing about this issue.

I welcome the Minister of State to the House. I raised this issue in the House with him a number of months ago. We are very much aware that the spiralling cost of insurance is placing a massive burden on motorists. I have been contacted by many people who are struggling to pay insurance premiums. As Senator O'Reilly pointed out, it is an issue that disproportionately affects rural areas where people do not have the luxury or option of public transport and, as a result, owning a car to get to work and do one's business is a necessity. We know premiums have risen by up to 50% in some cases over the past year, and there is potential for further rises as we move through 2017.

I know the Minister of State has been working extremely hard on this issue. It is very positive that we now have a report which seeks to provide clear recommendations on tackling the rising cost of motor insurance. We hope the national claims database will add greater clarity to the level of claims throughout the country and shed light on an area about which we know very little. We have figures from the Personal Injuries Assessment Board, PIAB, but there are questions that need to be answered by the insurance industry in terms of claims and settlements being made outside those structures. The personal injuries commission will provide an enhanced level of guidance on compensation in personal injury cases. As the Minister of State noted, the fact this grouping has met on two occasions and that it has an agreed action plan is very positive. The working group has recommended the establishment of a fraud database. This coupled with the new number plate recognition system will help to recognise uninsured drivers and tackle fraud, which is necessary.

I wish to highlight the plight of farmers who are informing me about big increases in their premiums. Some of them are quite significant - up to 30%. They tell me that the increases are not based on extra claim costs or increased risks such as large numbers of machines or tractors. Farmers and contractors with small and large operations are seeing increases. Farmers are battling with tight margins so trying to meet these costs is very difficult. We also know the potential challenges posed by Brexit, especially in the area of the movement of goods across the UK. It is essential that our road haulage companies have access to insurance premiums comparable to our European partners. Irish-registered haulage companies relocating to other countries to reduce their cost base mainly due to high insurance premiums is not in anybody's interest. We must ensure we are as efficient as possible to deal with any challenges we may face in a post-Brexit era.

That swift action has been taken is very positive. We need to see greater affordability for consumers. That must be our key priority, but most of all, in terms of tackling the rising cost of motor insurance, we need to see evidence on the ground of greater transparency and greater fairness. As the Minister of State is aware, I will be keeping a very close eye on it. We need to ensure we support people and to ensure insurance is affordable for them. I thank the Minister of State for his time and work on this issue.

I compliment the very good work carried out by the working group on the cost of motor insurance and by the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. It is fair to say that this is an issue that affects thousands of people and businesses throughout the country. It is also fair to say that the rise in insurance premiums is proving to be a major challenge for many people, and in some cases the ability to meet those rising premiums is threatening livelihoods and jobs. The evidence is very stark when it comes to motor insurance.

CSO data shows that motor insurance premiums have increased by more than 50% since 2011. That increase is way in excess of EU trends. From talking to people in the insurance industry, I know that motor insurance premiums here were discounted during the past ten years. That may have been done for competition purposes. The motor insurance companies would say they did not make money from the motor insurance market. I do not know what happened but motor insurance was priced as a loss leader and now insurance premiums are increasing. I do not know if the Minister of State is aware that premiums were discounted and perhaps that was due to what happened with Quinn Direct or dash for cash operations, but insurance companies did not make money from motor insurance. It is unfair that premiums have increased by 50%.

We must remember that under EU law the Government cannot mandate the setting of premium prices. That is the remit of the insurance companies. However, the State can play an important role in helping to stabilise this volatile market. In that context, this has led to some worthy recommendations by the working group in its research in terms of improving data availability, improving the personal injuries claims environment, reducing the costs in the claims process and reducing insurance fraud and uninsured driving, and promoting road safety. I am delighted the Garda traffic corps is being provided with vehicle recognition equipment. Northern Ireland is years ahead of us in that respect. There are still issues in certain sectors in terms of staged crashes. I have heard anecdotal evidence that sometimes insurance companies do not challenge those involved as much as they should have and, unfortunately, that has put the burden of the high cost of insurance on young people, businesses and motorists throughout the country.

A key element in protecting the consumer is to ensure we have increased transparency. We have engaged in much head scratching wondering how insurance companies' premiums have increased to such a high level but more transparency in how insurance companies calculate premiums would be welcome and would also allow the consumer to make a more informed choice. Insurance companies should have told people their insurance products were priced as loss leaders for the past ten years, not that anybody would have believed them. It is an issue with the premiums now having increased by 50% but that is their business. Some of the evidence on the rise in premiums makes for horrifying reading. The Motor Insurance Bureau of Ireland pays out up to €60 million annually to meet claims involving uninsured drivers. This is where vehicle recognition equipment comes into play and more Garda traffic corps vehicles need to be fitted with that equipment. We did not move quickly enough to sort out this problem. We must also address the issue of insurance fraud.

I echo the sentiments made by the Minister of State during a similar debate in the Dáil last month. He said that the work on tackling high insurance costs is about bringing stability to the market and delivering measures to ensure fair premiums for customers. There is now a determination on the part of the Minister of State, the Government and all parties to implement long-term measures to protect the consumer while ensuring we have a stable, transparent and competitive insurance sector.

I welcome the Minister of State to the House and take this opportunity to compliment him on his work on this important project. The cost of motor insurance has been a blight on many people. As Senator Hopkins rightly stated, it is a tax on rural Ireland in many ways. If one lives in rural Ireland, one's ability to get anywhere depends on travelling by car. The unfortunate rise in motor insurance premiums in recent years has had an awful knock-on effect. I welcome the approach being taken by the Minister of State and the working group's report. This is the type of proactive step that we need to see from Government.

One of the issues raised has been that of the number of uninsured drivers. That is a major issue for us and for the State, as is the issue of how we can tackle the pay-out of nearly €60 million on claims with respect to uninsured drivers. There has been movement towards getting a process in place to deal with that issue. That process will be one of the key issues, as will dealing with the issue of uninsured drivers.

As much as we have seen an epidemic in the rise of premiums in the motor insurance industry, we have also seen insurance prices rise in other industries in recent months. I spoke to a person involved in the retail industry in Clonakilty in west Cork only last week and that person saw public liability costs for a shop increase from €8,500 up to €14,500 in one year. We are seeing that trend of rising insurance costs throughout the entire market.

Senator Hopkins rightly raised the issue of farmers and, in particular, contractors who have been hit with excessive increases in insurance costs. Regular farmers who are not contractors have also been hit with such increases. There is an epidemic in terms of the rise in insurance costs. It will be a big challenge for us to deal with it and the way we deal with it will be the key issue. We have to follow on from this report in that they will have to be a report on insurance costs being borne by the retail and agricultural industries. We must examine how those industries have been affected by the exorbitant insurance price increases in recent months. They are feeling the brunt of what motorists felt a few years ago. We must work with the organisations affected in retail and agricultural industries in terms of preparing a report along the lines of the working group's report that has been published in order to move forward to stem that major increase in insurance prices. Insurance costs will be a major issue in terms of their competitiveness and taking account of Brexit and other issues. This issue is creating an insecurity in the market and we need to deal with it. It will be a major challenge facing us in next few months. I hope the Minister of State can examine the retail and agricultural industries and that we can act to stem the major increase in insurance costs in those industries. If we can do that, hopefully, we can stabilise the insurance market in the country.

Senator Feighan hit the nail on the head when he spoke about insurance products being priced as loss leaders. They might have been priced as loss leaders but other industries are now picking up the tab for that and that will be a major issue. We have to turn the screw to see what we can do to ensure we can protect those industries.

I compliment the Minister of State on grasping the nettle on this issue. It has been a tough year but he has made a great deal of progress. It would be appropriate for him to make a progress report to the House on this work in a few months because we need to examine the entire industry to enable us to stem the unfortunate price increases we have seen in recent months.

Our final speaker, as of now, is my fellow member of the joint committee, Senator Paddy Burke.

I welcome the Minister of State, Deputy Eoghan Murphy, to the House. The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach examined this issue and prepared a report. As a member of the Oireachtas committee that examined this issue, I learned of the many problems involved and it opened my eyes to the many issues that were raised at our committee meetings.

Various representatives appeared before the joint committee. I am sure the issues they highlighted have been raised before I spoke. Representatives of the legal profession, insurance companies, road hauliers, vintners in Dublin and rural vintners appeared before the committee and it appeared that this issue was nobody's problem. It is not the insurance companies' problem. They have to increase premiums because they have lost money. It is not the legal profession's problem. They have not created an increase in insurance costs. We heard that a new book of quantum was to come out and that it would be the be all and end all for claims, but that has not rectified the problem.

Senator Hokpins is right in that rural people have suffered greatly as result of such increases. The increases are putting an extra burden of cost on them. Many households now need not one car but two cars.

Most families nowadays are a two-job household so they need two cars. As each family now has to have different types of insurance, including house insurance, health insurance, car insurance, tractor insurance or public liability insurance, there are bigger and bigger burdens on families and all these insurance costs are increasing by the month.

There are one or two problems here. The big problem is that there is not enough competition in the market. We need to get more competition. There are basically only six companies in motor and lorry insurance. I was talking to a lady involved with the road hauliers today, who renewed her premiums last month for the next 12 months. She has seen an increase of 300% on last year, which is outrageous. She tells me that it is possible in Poland to buy a new lorry and to get four years' insurance at a fixed cost. Were one to buy the same lorry in Ireland, the premium probably would go up by 50% or 100% next year, by another 100% the following year or perhaps by 300%, as happened to her and is probably happening to all hauliers. It is making this country uncompetitive. Our transport is mainly lorry transport, roll-on, roll-off, travelling through England or onto the Continent via the ferries in Cork and Rosslare. These premiums are outrageous. The hauliers can reflag in other countries if they want, at a much lower cost. They spelled that out to us.

There is not enough competition in the market. Maybe there is a cartel there as well. We cannot rule it out, given the limited options people have for their insurance. While I welcome the Minister of State's speech today, this is a big problem which is not going to go away. It is putting a huge burden on families and businesses. In respect of commercial rates, there is a publican at home whose case I also highlighted at the committee meeting. He is paying €65,000 per annum for insurance for a small pub that does a little bit of food. It is unsustainable. It is worse than his rent, rates and all his other costs put together.

Before I go back to the Minister of State, I would like to acknowledge that Eoin Hartnett, our policy adviser from the joint committee on finance, is in the Visitors Gallery. He was very closely involved with putting our reports together and I thank him for his work.

I invite the Minister of State to make his concluding remarks.

I thank the Senators for participating in this evening's debate. I appreciate the opportunity to speak about the report and hear Senators' reflections on it as well as what they are hearing from their constituents up and down the country. A big part of how we were able to do the work was that people got in touch with their Deputies and Senators, who in turn got in touch with the working group or the committee to pass on the information we needed. I thank those Deputies and Senators who fed that information through to us, as well as all the stakeholders who engaged with our working group and helped us put together the report. I thank the working group itself, which is comprised of representatives from public agencies including the Central Bank, the State Claims Agency, the Personal Injuries Assessment Board and various Departments. The manner in which the work of the joint committee and the working group was done is a model for how the Government, Oireachtas and industry stakeholders can co-operate to get a meaningful outcome and a result that we can put into action and see delivered. It also is part of keeping oversight over the Government to make sure we are living up to our commitments.

These insurance increases of which we have been made well aware by people up and down the country and which we have experienced ourselves have undermined the personal gains people have made through wage increases or personal tax reductions as the economy has recovered. They have also challenged competitiveness for businesses. We need to keep a constant eye on our competitiveness to keep the economy fit, especially because of the Brexit challenges that are coming down the line. We have moved from motor insurance, which was the first part of our work last year. In our second phase we are looking at employer's liability, EL, and public liability, PL. I will come back to that issue in more detail as Senator Lombard raised it specifically. The reforms we brought in to the motor piece, particularly in respect of the Personal Injuries Commission, the transparency issue, and the stronger powers for the Personal Injuries Assessment Board, will feed into EL, PL and other areas as well.

The comments of the Acting Chairman, Senator Horkan, about transparency over claims and what we need in that regard hit the nail on the head. The ability to negotiate is quite important. We have to recognise that this is a market and, if they shop around, people will get a better deal. One of the reforms in the action plan is to give more people time to shop around, as well as more information as to how their premium has been calculated and the reason for any increase that has been applied. Consumers will then be better informed and better able to take advantage of the marketplace. There are things we need to do to improve that marketplace and I will come back to them. Senator Paddy Burke raised those issues.

On the public quantum, Senator Horkan is absolutely right that it is not and should not be a target for claims. It is a historical reflection on claims that have been delivered. That is why the work of the Personal Injuries Commission will be so important. It is going to create that guide through the grading of different types of personal injury, the grading of whiplash and through the international benchmarking exercise it is going to carry out. That will provide better information to guide the awarding of claims by the judiciary. I thank the chairman of the Personal Injuries Commission for taking on this important piece of work. He is very committed to it, as I know from my own interactions with him. The terms of reference and timeline are given on page 100 of the report, as well as what they hope to achieve.

The technology for tracking driving does exist. The Port Tunnel in Dublin is going to have a camera at either end in order that one can tell the average speed through the tunnel. People will be fined if they are seen to have breached that speed. We can do that on parts of a motorway, for example, although a couple of refinements need to be taken on board. There is no reason we should not be using technology to make our roads safer. Road deaths are needless and we should do anything we can to prevent them from taking place.

Regarding oversight of the implementation of the report, it is right that we put in place an action plan stating every single step. It is right that we put in place the responsible actors for implementing those steps. Too often in the past, when the Government has talked about doing something, we have not known who is responsible for achieving it. It is right that I produce quarterly reports and attend the committee and this Chamber to be answerable on them. The Oireachtas should play an oversight role for Government action.

Senator Kieran O'Donnell talked about the 70% of claims over which we have no transparency. That is a big problem. How can we talk about what is actually happening and improve things in the future if we do not know what 70% of the claims environment looks like? It was a key point in the joint committee's report, which focused on the transparency issue and made its importance quite clear. The joint committee was able to do in public what we were doing in private as a working group. It explained to the public what are the different problems, took away some of the cobwebs, demystified the issues and showed that it is a complex area in which the problems cannot be solved overnight. That was very helpful.

Senator O'Donnell puts a very high value on empirical evidence, and he is right to do so. We have to be driven by the data, which lead us to where the actual problems are. We must not be taken in by false narratives that are put out into the public domain, which would take us down blind alleyways and away from where we need to go. As for the book of quantum, the Judiciary has an important role in this regard.

In other jurisdictions they publish their own version of the book of quantum. What we are hoping to do through the personal injuries commission and through the greater powers that we are going to give the Personal Injuries Assessment Board, is that we can get their joint work together on a more formal footing with the Judiciary. That is key. That is the ambition that is in the report.

A number of Senators raised the issue of cartels. This is being worked at but not by the Department of Finance, it is not its responsibility. That work is separate to mine, but I have raised my own concerns with the Competition Authority during the process last year. The example which Senator O'Donnell gave sounds like something that might be for the declined cases process. There is a section in the report which speaks to reforming that process by making it more transparent, more understandable and more accessible to consumers.

We ought to be mindful as we seek to reform the market and bring in new transparency measures that we do not bring about anything which might lead to price signalling or price fixing in the market. We have to recognise that these are individual companies which are competing in a market and we would not want to unwittingly help them to do something that they should not do through our own desire and zeal for reform.

It is important to note that premiums were too low in this country. They were unsustainably low. In recent times we have also seen an unusual situation where there have been negative yields for investment companies which has affected their model. It is important that we recognise that, as we seek to reform the insurance market and bring about fairer premiums for consumers, we will not go back to the very cheap premiums that we saw in the past because they were not sustainable.

Senator Craughwell asked about the sharing of data publicly and how easy that should be. He is absolutely correct. Insurance companies collect a huge amount of data in a very professional way. As we seek to put in place a national claims information database to be held by the Central Bank, we have to be mindful, first, that we do not get in the way of any data protection laws which might undermine that database once it was in place but, second, that companies define data in different ways. They define incidents, cases and claims in different ways so we need to come to a single understanding in order to interpret that data so we can collate it and decide what the parameters are. That work is already under way but it needs to be done before the database is up and running. For uninsured driving in the third quarter of this year, the uninsured drivers' database will go live for use. Having that in place early will be a very important achievement.

There is a long tail in the legal process and the claims process. If we can make the Personal Injuries Assessment Board stronger, so that fewer cases fall out of it, if we can have things like pre-action protocols in place that will keep more cases from getting to the steps of the court or getting to a litigation phase, that would be beneficial to shortening that process. In addition, if we are able to get greater consistency over awards - which is why the work of the personal injuries commission is so important - we should be able to shorten that process. It would also help us tackle those exaggerated or fraudulent claims which increase the cost to all of us who drive.

The goals of the Personal Injuries Assessment Board are: to increase the percentage of cases that remain within it; to make it quicker for the claimant, where there is a genuine and legitimate claim; to make it fairer for both sides in the process; to eliminate fraud; and make it cheaper for all drivers. The quicker a fair claim is settled in a fair way for the claimant, the less of a cost there is for the insurance company and the less of a cost there is for all of us who drive.

Senator Craughwell raised concerns about first responders. I am aware of this concern and understand the difficulties that some of them are facing in this area. I know from the insurance agencies that they are weighing this as a higher risk considering some of the duties that may be performed as a first responder, such as the need for haste, and locations in the country and we need to be mindful that insurance companies must price their premiums based on the risk as they assess them. As Senator Feighan pointed out, the Government cannot interfere in the pricing of insurance products because it is against EU law.

Senator Warfield spoke about the action plan. It is important to stress that there are timelines and designated actions to designated Departments and agencies. They have their responsibilities and we are already reporting on those actions. Very recently, perhaps in the last couple of weeks, following its appearance at the joint committee, the Department published an update on what has already taken place and what we are already doing. This is ahead of the quarterly reports. I wanted to be clear to the committee that work has already begun and I am committed to making sure that work is done in accordance with the timelines set out in the report.

Of course the insurance industry has a role. I am not going to let anyone off the hook in that regard. It is not a case of me saying to the insurance industry that I trust it to go ahead and put all of these reforms in place. It is a piece of this, one stakeholder among others. It is right that the Department of Finance, in the role that I have had chairing that working group across government, has identified the right reforms, who is responsible for implementing some of them and that we now drive those reforms according to the timeline that we have. It is not about defending the industry or letting it off the hook in any regard. We have put it at the centre of this initiative. It is responsible for reforming itself and we will play the oversight role, with the help of the Oireachtas and with the joint committee to make sure it does so.

Senator Warfield raised the issue of the formula. This also came up in the joint committee and I told it then that it was under consideration. We know it works in other jurisdictions and I have an obligation to examine things where they work. I also understand the risks that are in place and we will not move quickly on this. We will make sure that we are aware of all the concerns and we can have a proper debate in the Dáil if we are to move to this new type of model for funding the Garda Síochána's detection of fraud.

Senator Daly raised a key issue in all of these things which is implementation. There is no point in producing a report and letting it sit on the shelf. A year later, when people ask what has been done, the Minister replies that it has been a bit of this and a bit of that. That is why we have gone with this action plan model and have laid it out very precisely. Someone said that 71 actions is too many, but if one takes some of those actions, seven or eight relate to one particular thing, one key priority that we wish to achieve. The reason there are seven or eight actions is to show the exact steps so that if we miss a step, Senators can pull me in here and ask what is happening and why there is a delay. This is to avoid us missing it and six months down the line, I might say that four months ago there was a problem and I am sorry that I did not tell Senators about it then. This means that Senators can better hold me to account and it makes sure that I can get my work done to the standard that there should be in government, which is transparency and accountability over the work as it does it.

Do the recommendations go far enough? There is a suggestion that the compulsory element of motor insurance makes it a great market to be in. We know from the data, that most insurance companies and their motor sections, have not been recording profits in recent years. It has not been a great market for them. In addition, if it is such a great market, why is there not more competition, particularly in certain sub-sectors to which other Senators have alluded? There have been suggestions of a cartel and I cannot comment on that. However, the more data we have and the more transparent that data, that will let us know exactly how good a market it is and will prevent companies - or as some people here are suggesting the industry - from being able to protect itself from proper scrutiny and we can get a proper understanding of just how healthy the market is. That is something that we do not have at the moment.

Our reforms will bring those databases together. Some databases talk to each other, others do not. Some companies in the industry consult databases, others do not. We must make sharing of data and the linkage of databases compulsory. The master licence record, which we are now expediting, will be key to this. All this information will be joined up and identified with one single number for one driver so it is possible to see what the situation is for drivers regarding their insurance, tax, road history and what car they are licensed to drive. That is very important when we look at the commercial side of this, with companies operating fleets.

Young drivers are a very difficult element. Insurance companies will explain that they assess them as a higher risk and therefore there is a higher amount to be paid out. If one looks at areas where there are not strong transport links, say in rural areas, and Senator Hopkins has spoken of her own constituency, a car is essential to young drivers as they become adults so they can go about their adult lives. The intention is that the general reforms will help those younger drivers. When we look at the declined cases agreements, and the reforms we want to introduce, those will help young drivers. Telematics will help them. Some insurance companies are using telematics in cars to help deliver lower premiums for young drivers. I want to see every company do that. I want to see young drivers taking those telematics on board to help get themselves lower premiums but it is not just a money issue when people are driving. As new drivers come onto the roads, they will help them drive more safely. Any death on the road is a needless death. It does not need to happen and we are doing everything we can to prevent such deaths.

Senator Reilly spoke about drivers in rural constituencies and the difficulties that they, in particular, are having with premiums which are unaffordable. It is not a casual matter. This is a necessity and it is essential that we bring about these reforms to make sure that the insurance market is not pricing people off the road who need to be on the road. Unfortunately, the evidence suggests that there has been an increase in uninsured driving. It can only be related in one part to the fact that premiums are becoming so unaffordable in certain parts of the country.

Senator Reilly raised the issue of public liability insurance. As I referenced, that is the thread on which we are working. When we looked at the fraud database we wanted to put in place, we looked at a number of markets and models. There is a claims underwriting exchange in the United Kingdom and it is the preferred model. The insurance industry is to pay for this database which will be held by an independent body. The key piece in getting it in place is data protection which is becoming more and more important as more and more data are digitised and put online. When we have the fraud database in place, we will have to make sure no one will appear on it by accident because that would be defamatory and we would face legal cases. It could risk several years work being shut down because we had moved too quickly and infringed on a person's rights. We have to get it right, but we are going to do it in the two-year timeframe outlined in the report.

We need to remove the incentive for insurance companies to settle claims early. Insurance companies talk about there being an economic incentive to settle a claim early, even when they think it might be suspicious. I spoke about this matter earlier. The reforms mentioned in the report will help in this regard. We are also going to make it mandatory for insurers to consult policyholders before they settle a claim. Too often we have heard from constituents and citizens how something innocuous in a carpark later led to money being paid out by an insurance company without consultation with the policyholder. That is not fair; the policyholder needs to be consulted. By strengthening the PIAB, bring forward pre-action protocols and bringing about consistency in the awards given, it will shorten the process.

I spoke about uninsured driving, a matter raised by Senator Reilly. The database will go live in the third quarter of this year. The Senator spoke about fees, legal and non-legal. They are a consideration. We are will keep looking at this issue and reviewing the position until the work is done. As I said, we are in the second phase of our work, looking at employer's and public liability insurance, but we are driving on with implementation of the first piece of our work, the motor insurance piece. As we do so, we are finding new reforms that we want to put in place. Later in the year, we will publish the addendum to the motor insurance report, the report on employer's and public liability insurance, and will be making a couple of changes to the motor insurance piece to include further reforms that we consider necessary and helpful to the market.

Senator Hopkins has been absolutely dogged in her pursuit of this issue, as others in this House have been. I compliment her on her work. Not only has she raised the issue publicly, she has also been in contact with me privately on a number of occasions to see how she can help and what work is being done. That kind of help from Senators is very welcome. The Senator is right to point out that there will be premium rises for some consumers this year. There is no point in trying to fool people. This problem will not be fixed overnight, but we are working day and night to fix it. However, in the course of this year, people will see their premiums going up and we need to be honest with them. It is important that those of us who have worked for so long on this issue and know of its complexity be honest with people. We are moving to fix this problem for them, but it will take a little more time. The national claims information database will answer many of the questions concerning the 70% of claims mentioned by Senators Hopkins and Kieran O'Donnell in terms of what is happening in the claims environment. That will help to improve our understanding of how we need to tackle the issue further into the future. As pointed out, the personal injuries commission is a vital piece of the puzzle. I refer Members to page 100 of the report which includes the terms of reference and the timeline involved. People will see exactly what it is to achieve. I have spoken to the chairperson who is absolutely committed to getting things done quickly.

We are, as I said, looking at employer's and public liability insurance. As I have not yet met any representative from the farming community, if the Senator can help to identify the best people to whom to talk, I will meet them immediately. Today I met representatives of business groups, individual businesses in the entertainment industry and the Vintners Federation of Ireland. We had another working group meeting this week when we heard presentations by representative bodies. As new concerns are raised with me, I need to meet the people concerned in order that we drill down into their data to gain an understanding of their concerns. I would appreciate it if the Senator shared the names with me.

I have met the representatives of hauliers. They appeared in front of the joint committee and we are aware of their concerns. It is a very challenging environment for them and it will be made even more challenging by the Brexit dimension. The changes they want to see made in the market can only be made at a European level, but I have made a commitment that we will raise the issue at a European level to see if we can achieve some consensus on the insurance piece. There is an insurance single market. Insurance companies based in other jurisdictions can operate here on a freedom of enterprise or service basis, but they can only do so if they are willing to register and contribute. That is the key piece. They can operate here, but they need to make sure they operate to what the courts have determined in terms of their obligations. They have several concerns about companies flying under a different flag to avail of the offerings of insurance companies in other jurisdictions. This something we will have to raise at a European level.

Senator Feighan spoke about livelihoods and jobs and how they were being threatened. It is very important that we work together to tackle this issue. We need to work together on the legislation that will be brought forward this year as part of our work in the Dáil and the Seanad to fast-track it and make sure it will come through without unnecessary delays.

The Senator is absolutely right when he talks about the massive correction in prices we are seeing. What we are talking about are super cycles in the insurance industry which are incredibly damaging, not just for the industry - one might say damage to the industry is the least of our worries - but also for consumers. Yes, they avail of lower premiums, which is very helpful when it happens, but that is no good to anyone if we are to see a 50%, 60% or 70% hike in premiums in a very short period of time. There are a number of reasons we seem to have super cycles. As they are listed in the report, I will not go into them. Solvency II is one of the reforms on the back of the financial crisis. Senator Kieran O'Donnell is nodding; he knows all about Solvency II. It is to help to protect us from super cycles, but the reforms mentioned will protect us too. If they are introduced, we will not be back to paying insurance premiums of €150 or €200, which would not cover the cost of replacing a windshield. That will not happen and we need to be realistic on that front.

We are almost there on the introduction of automatic number plate recognition technology, while the uninsured driver database will go live in the third quarter. That is very important. We are behind in how we use technology in tackling these issues, but the changes will come quickly now because there is a commitment from the industry to work with An Garda Síochána and the Department.

We have been working for over one year to reform the insurance sector. The working group I chair was set up last June. I was asked to chair it by the Minister for Finance, Deputy Noonan, and the first piece of work was the compensation framework which needed to be addressed to deal with company failures, which impact on all drivers because premiums are weighted with levies. We needed to make sure there was a proper compensation framework in place. That work has been complicated by an ongoing dispute in the courts, but progress has been made with the insurance industry on how we might bring certainty to what the compensation framework should be. Once that piece of work was completed early last year, we had to look at the issue of flood insurance because of the experiences of people last year, in particular. It was very important that that piece of work be completed and it was completed under the Minister of State at the Department of Public Expenditure and Reform, Deputy Canney. We were then able to move to the non-life sector. The working group was set up and we decided to prioritise motor insurance because the issue was affecting everyone. We are now moving to consider employer's and public liability insurance which is very important to business.

Senator Lombard spoke about this being a tax on rural Ireland. It is very interesting that he put it that way because some of the suggestions from other parties which might be considered to be on the left of the spectrum would involve the State getting involved in providing insurance cover. The models I have seen where the state provides insurance cover operate by means of an increase in the price of petrol to cover insurance costs. I understand that the more one drives, the more one will pay. That is not a fair way to do it, particularly if one is living in parts of the country where the public transport network is not good and one has to travel long distances to work. That is why I am not in favour of the public models suggested, but we are continuing to look into the matter because I want to make sure we have not missed anything.

The Senator also raised the issue of uninsured driving. It is incredibly important and we are moving to address it.

To explain what is happening on employer's and public liability insurance, we finalised a report on motor insurance at the end of last year. We moved to publish it once I was able to bring it to the Cabinet at its first meeting this year. We have begun with the working group to work on the terms of reference for the employer's and public liability insurance piece. We have engaged with a number of stakeholders which have been giving us very helpful information on what they are experiencing as employers. Most of the work done so far has been on public rather than employer's liability insurance. Earlier this week we heard about businesses such as pubs and hotels that might have hosted birthday parties or wedding receptions but which are now finding it impossible to get insurance cover at a price they can afford to continue to offer these services. They have to take out that piece of the business offering and in so doing are undermining their business as a whole. That is something we really need to address.

When we have finished this phase of our work, which will be in the next couple of months, and once I am clear I have identified everyone I need to talk to, we will produce an addendum to this report. We will then probably reproduce the documents as one final report because there are a couple of changes I want to make to the motor section also. I hope that work can be completed by this summer. That is the timeframe we are working to. The work on the personal injuries commission and national claims information database has already commenced. All that will help because it is not particular to the motoring aspect; it is particular to data, injuries and everything else. The report being called for will come.

I thank Senators for their support and kind comments. It is helpful when we can work together. They are absolutely right to talk about Brexit and competitiveness. That is key. When in Canada as part of the Government mission around St. Patrick's Day, I was talking to people who wanted to return home and who have seen the improvements and the jobs that exist. The jobs are not just in Dublin but also around the country. The people are considering factors such as the cost of motor insurance and asking whether their no-claims history will be recognised and whether the fact that they have a licence and have been driving in Canada will be recognised. It is a concern for them and absolutely needs to be tackled. Where people want to return home to work, live in a community, play on the local sports team and bring life back to our communities, we need to ensure factors such as the cost of motor insurance are not stepping in their way. This would be a really stupid thing - sorry, I cannot find a better word - to let get in the way of people who want to return home and make a positive contribution to their community once again.

Senator Paddy Burke referred to the amount of time the joint committee spent on this issue. The public nature of the joint committee's engagement was very helpful in promoting public understanding of what the real issues are. It has helped in trying to end the blame game we saw. It is in no one's interest to have people in different parts of this industry and market going on air and publicly blaming one another at every opportunity. We need to find the solutions for the future and drive those forward. The committee's work was very helpful in that regard. It was also very helpful in making us realise this is not a simple issue. It is a complex issue and there is no silver bullet. As the joint committee's report stated, along with the working group's report, there is a suite of reforms that need to be implemented. Implementation takes time but as long as we are working together and there was oversight of both sides of the process, we can get it done.

The Senator is absolutely correct about insurance and how it is being viewed at the moment. Insurance used to be seen as a necessary protection, be it for a business or a driver. Now the insured is regarded as a target that encourages one to make a claim. We need to move away from that kind of environment and culture completely. We need a more transparent, stable and competitive market. I agree with all the sentiments in that regard.

The Senator raised the issue of hauliers. I am aware of his concerns, which he raised in the past. The hauliers are looking for change. We are trying to work with them to find the means of effecting the necessary change. The difficulty is that the change they seek in many areas regarding insurance is change that requires consensus at European level. Everyone knows consensus-building at European level takes time. That said, the other reforms we are implementing should have a positive impact for the hauliers as they seek insurance in the future.

The Senator raised the issue of cartels. That is not a matter for which my office has responsibility but we are aware the matter is being considered.

I thank Senators for their engagement this evening. I am more than willing to come into the Chamber to go through each quarterly report with Members as it is published. This is to hold the Government to account and make sure we are getting this work done in the interest of citizens and consumers throughout the country.

I thank the Minister of State for his very comprehensive response. He was devoting an average of approximately three minutes to each speaker. Just 29 minutes and 45 seconds after he begun, I am thanking him for his response. I thank all Senators who contributed to the debate. The proof of the pudding will be in the eating for all of us as we see our insurance renewal notices arrive year on year. As I stated in my speech, I thank the Minister of State for all his efforts. I thank fellow members of the joint committee and all the Senators involved.

When is it proposed to sit again?

At 2.30 p.m. next Tuesday.

The Seanad adjourned at 7.55 p.m. until 2.30 p.m. on Tuesday, 28 March 2017.