Tuesday, 26 March 2019

Questions (225)

Thomas P. Broughan

Question:

225. Deputy Thomas P. Broughan asked the Minister for Finance the timeframe for his proposed and much needed four major measures to address the rising costs of insurance for householders, drivers, small businesses and community development bodies; and if he will make a statement on the matter. [13702/19]

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Written answers (Question to Finance)

In his contribution to the Dáil debate on a Fianna Fáil insurance motion of 13 March last the Deputy raised 4 issues, – namely, matters regarding the National Claims Information Database (NCID), notifying policyholders of claims made against them, updating the Book of Quantum, and setting up a dedicated Garda insurance fraud unit. In responding to the Deputy's question I propose to take each of these four issues in turn.

National Claims Information Database (NCID): I can confirm that the NCID will be fully operational soon and later this year it is expected that the first report will be made. While it is important that the database initially focuses on private motor insurance, the relevant underpinning legislation – the Central Bank (National Claims Information Database) Act 2018 – allows for the scope of the database to be expanded to other types of insurance. In this regard, a recommendation was made in the Cost of Insurance Working Group (CIWG) Report on the Cost of Employer and Public Liability Insurance for the Central Bank to conduct an analysis on the feasibility and merit of extending the NCID to employer and public liability insurance. It is considered that the second half of 2019 is the most appropriate time to expect the Central Bank to have completed this task.

Notification of policyholders of claims made against them: the CIWG agrees that insurance companies ought to notify policyholders of claims made before settlement, the amount a claim was settled for, and the reasons why the claim was settled. Accordingly, this exact issue forms the basis of Recommendation 10 in the Report on the Cost of Employer and Public Liability Insurance. In addition, a similar recommendation in respect of motor insurance policyholders has been included in the Report on the Cost of Motor Insurance. Having been unable to reach agreement with Insurance Ireland on a new set of guidelines based on those drawn up by IBEC and the Irish Insurance Federation in 2004, my Department is currently considering the merits of addressing this issue through primary legislation, specifically by an amendment to a Private Members’ Bill on Consumer Insurance Contracts.

Regarding the Book of Quantum, the Fianna Fáil motion of 13 March called for the immediate commencement of the Personal Injuries Assessment Board (Amendment) Act 2019 in order to require PIAB to update the Book of Quantum at least every three years. I understand from the Minister for Business, Enterprise and Innovation that it is intended the Act will take effect from 3 April 2019. However, it should be borne in mind that the Book merely reflects the prevailing levels of compensation for various types of injury based upon what has actually been paid out in the Courts, by the State Claims Agency, or awarded by PIAB. Currently, therefore, the only way that the award levels in the Book can be lowered is if there is first a decrease in the actual level of awards paid out. In this regard, the Personal Injuries Commission (PIC) has proposed that this reduction be achieved by the Judicial Council compiling a recalibrated set of guidelines for various types of personal injury, which would in effect replace the Book of Quantum. Minister of State Michael D’Arcy has made it clear that bringing the levels of damages awarded in this country more in line with those awarded in other jurisdictions is his primary objective, and has been exploring a number of options in attempting to reach this target. In this regard, Minister of State D’Arcy has engaged with his colleague, the Minister for Justice and Equality, Charlie Flanagan, and he has been informed that the Judicial Council Bill is to be prioritised with a view to having this legislation in place as soon as possible to allow for the establishment of the Judicial Council.

Garda Insurance Fraud Unit: the CIWG’s latest Progress Update confirms that the Garda Commissioner has undertaken to further consider the establishment of an insurance fraud investigation unit within the Garda National Economic Crime Bureau (GNECB). In response to the original proposal to explore the possibility that a specific unit be set up within An Garda Síochána using funding from the insurance industry, the Commissioner indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the Exchequer for the purposes of tackling insurance fraud. The Deputy will, of course, appreciate that it is the Garda Commissioner who is responsible for the allocation of resources within An Garda Síochána and neither I, nor Minister of State D’Arcy, nor the Minister for Justice and Equality has a role in such operational matters. Nevertheless, Minister D’Arcy remains committed to pursuing this matter, and is hopeful that there will be improved investigative capacity in place in this area shortly.