Dáil Éireann Debate, Thursday - 17 June 2004
85 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she or her Department has investigated the negative impact of high insurance costs here; and if she will make a statement on the matter. [18223/04]
View answerThe negative impact of insurance costs for businesses with regard to profitability and competitiveness and for members of the public in general has been brought to my attention. The difficulties caused by high insurance premia for all sectors are of great concern to the Government. The agreed programme for Government includes a commitment to tackling the high cost of insurance and it is the Government's firm intention to implement the necessary measures indicated therein.
The insurance reform programme that I announced on 25 October 2002 comprises a comprehensive set of inter-related measures designed to improve the functioning of the Irish insurance market. The key measures include the implementation of the recommendations in the Motor Insurance Advisory Board action plan within a target timeframe. They also include the establishment of the Personal Injuries Assessment Board which was signed into law on 28 December 2003. The board was established and members appointed on 13 April 2004. The Personal Injuries Assessment Board commenced dealing with employer liability cases from 1 June 2004 and it is my intention 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 Personal Injuries Assessment Board, was published by the Personal Injuries Assessment Board on 2 June 2004.
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 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. For example, the introduction of the penalty points system has already reduced the number of accidents on our 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. The Minister for Justice, Equality and Law Reform published the Civil Liability and Courts Bill on 11 February 2004, currently before the Houses of the Oireachtas. This Bill contains measures to streamline the law on personal injury claims, including measures to deal with fraudulent and exaggerated claims.
I chair a ministerial committee, established to drive the co-ordinated implementation of the reform programme across 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.
While EU law prohibits the imposition of price control on insurance, 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 Central Statistics Office publishes monthly indices of costs for a number of classes of insurance. These statistics show that there was a reduction of 12.9 index points — 12.1% — in motor car insurance between the months of October 2002, when the programme was launched and April 2004. Reductions are also beginning to occur in the cost of employers' liability and public liability insurance premia, which represent a significant burden for businesses. As implementation of the reform programme continues, I expect further reductions to occur. 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.
