Dáil Éireann Debate, Tuesday - 23 March 2004
102 Mr. O’Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment her proposals to bring about a substantial reduction in motor insurance premia; and if she will make a statement on the matter. [9063/04]
View answerThe insurance reform programme that I announced on the 25 October 2002 comprises a comprehensive set of interrelated measures designed to improve the functioning of the Irish insurance market. I chair a ministerial committee established to drive the co-ordinated implementation of the reform programme across the relevant Departments and other bodies concerned. Substantial progress is being made on a range of measures that will radically overhaul the functioning of the insurance market and help tackle the high cost of insurance.
The key measures include the implementation of the recommendations in the Motor Insurance Advisory Board action plan within a target timeframe. To date, 32 of the recommendations have been fully implemented, four partially implemented and work is in progress on the implementation of the other recommendations.
A second measure is the establishment of the Personal Injuries Assessment Board. The Personal Injuries Assessment Board Bill 2003 completed its passage through the Houses of the Oireachtas on 19 December 2003 and was signed into law on 28 December 2003. The provisions of this Act will be commenced in the near future. A CEO designate has been appointed and commenced duty on 2 February 2004. The proposed structure and staffing levels of the new body are finalised and a recruitment campaign commenced in February. The board will be operational when the necessary staff and IT systems are in place, which is expected to be in the second quarter of this year. The PIAB interim board has made significant progress in this regard.
My Department and the Competition Authority have undertaken a joint study into the insurance market. The study will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. The bulk of the study was completed in 2003 and a preliminary report and consultation document on competition issues in the non-life insurance market was published on 18 February 2004. Following a two month consultation period, a final report will be published which will contain recommendations based on its findings.
Significant progress has been made by the Department of Transport in relation to the implementation of the road safety strategy. The Minister for Justice, Equality and Law Reform published the Civil Liability and Courts Bill on 11 February. This Bill contains measures to streamline the law in relation to personal injury claims including measures to deal with fraudulent and exaggerated claims.
While EU law prohibits the imposition of price control on insurance I have made it clear that I consider there to be an onus on the insurance industry to ensure that the reforms to be taken will have the effect of significantly reducing the cost of premia to consumers and businesses. Indications to date are that the reform programme is having its desired effect. The CSO publishes monthly indices of costs for a number of classes of insurance. These statistics show that there was a reduction of 11.8 index points,11.1%, in motor car insurance between the months of January 2003 and January 2004. Further, the CSO noted a significant contribution from insurance to the recent reduction in inflation. As implementation of the reform programme continues, I expect further reductions to occur in all forms of insurance. I am also confident that the measures the Government is putting in place to reform the Irish insurance market will attract new players into the market leading to further downward pressure on premia.
