Dáil Éireann Debate, Thursday - 17 June 2004
74 Mr. Gogarty asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has plans to tackle the huge cost of public liability insurance, which is inhibiting plans to increase recreational and sporting amenities nationwide, including bowling greens, skateboard parks, playgrounds; if State-funded insurance has been looked at as an option; and if she will make a statement on the matter. [15347/04]
View answerI am concerned about the difficulties that are being caused by high insurance premiums. The insurance reform programme, which I announced on 25 October 2002, comprises a comprehensive set of inter-related measures designed to improve the functioning of the 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. Substantial progress is being made on a range of measures that will radically overhaul the functioning of the insurance market and help to tackle the high cost of insurance. The key measures include the implementation of the recommendations in the Motor Insurance Advisory Board's action plan within a target timeframe.
I wish to refer to the establishment of the Personal Injuries Assessment Board. The latter board was signed into law on 28 December 2003. The board was established and members appointed on 13 April 2004. The PIAB started to deal with employer liability cases from the 1 June last. I intend that it will commence dealing with motor and public liability claims from autumn 2004. A book of quantum — an aid for assessing the level of compensation based on the type of injury involved — which is essential for the successful operation of the PIAB was published by PIAB on 2 June 2004.
The Department of Enterprise, Trade and Employment and the Competition Authority have undertaken to conduct 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 consultation, a final report will be published later in the year which will contain recommendations based on the findings.
Significant progress has been made by the Department of Transport in the implementation of the road safety strategy. The introduction of the penalty points system has reduced the number of accidents on the roads, which has benefits far beyond the cost of insurance. Two new road traffic Bills are expected to be enacted by the end of July 2004. On 11 February last, the Minister for Justice, Equality and Law Reform published the Civil Liability and Courts Bill, which is before the Houses of the Oireachtas. The Bill contains measures to streamline the law in respect of 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. The statistics show that there was a reduction of 12.9 index points, or 12.1%, in motor car insurance between the months of October 2002, when the programme was launched and April 2004, the latest month for which figures are available. Reductions are also beginning to occur in the cost of employers' liability and public liability insurance premia, which represent a significant burden for businesses. I expect further reductions to occur in all forms of insurance as the implementation of the reform programme continues. 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.
The Deputy has asked whether State-funded insurance has been looked at as a means of providing cheaper insurance. I do not believe that State-funded insurance would be appropriate. My priority is to reform the Irish insurance market and make it attractive to new private sector entrants. State funding of an insurance company is not in compliance with EU rules on state aid.
