At the outset, it is important to note that while as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, neither my Department nor the Central Bank of Ireland collect the type of information being sought by the Deputy. Currently, the only public information available in relation to awards are those settled by PIAB, and those awarded in Court. However what percentage these settlement channels make up of overall award levels, the Cost of Insurance Working Group (CIWG) was not able to establish. In its report on the cost of motor insurance, the CIWG indicated as follows “Claims details in relation to direct settlements between insurers and claimants are not publically available. Some commentators estimate that direct settlement comprise 60%-70% of all cases thus this represents a significant data gap”.
Consequently, the CIWG recommended that such information be collected as part of the National Claims Information Database. One of the key purposes of collecting claims data by settlement channels is to give greater insight into how costs and awards differ depending on the method of settlement.
The Deputy will be aware that the Oireachtas recently passed the legislation to provide relevant powers to the Central Bank of Ireland to establish the National Claims Information Database. Section 4 of the Central Bank (National Claims Information Database) Act 2018 sets out the different settlement channels through which a claim may be finalised. The breakdown of the various channels in the Section was identified as important to allow policymakers to see trends or distinctions in the costs related to these channels and to enable them develop more targeted response measures where necessary. This information is expected to include motor insurance claims information in respect of the last 10 years, including the number of claims reported and settled, the amounts paid on claims, the incurred cost on claims (i.e. the amount paid plus the outstanding amount to be paid, if any), and the actuarial estimate of the final cost of claims i.e. ultimate costs.
The Act was commenced by the Central Bank (National Claims Information Database) Act 2018 (Commencement) Order 2019 (S.I. 2 of 2019) on Monday 28 January 2019. The required consultation by the Central Bank with regard to the publication of the relevant regulations to outline the scope of the Database took place in mid-March and I understand that the Bank is finalising arrangements to publish these regulations. The Central Bank plans to collect motor claims data from insurance undertakings in the first half of 2019, with a view to publishing its first annual report under the legislation in the second half of the year. The Central Bank will also as the Deputy is aware consider the feasibility of expanding the scope of the database to cover employer/public liability later this year.
To conclude, I believe that increasing transparency in and around the settlement channels is a key part of claims information, and having this information will allow policymakers have a better understanding of the way the market is evolving and thus enable them better identify and take action to address trends in the market.