Dáil Éireann Debate, Wednesday - 17 April 2019
43. Deputy Michael McGrath asked the Minister for Finance when he plans to bring forward legislative changes that would oblige insurance companies to inform policyholders of claims made against them; the reason he has not brought forward legislation in its own right; and if he will make a statement on the matter. [17767/19]
View answer62. Deputy Aindrias Moynihan asked the Minister for Finance when he plans to introduce legislation to ensure motor insurance policyholders who have claims made against them are informed of claims against them before a settlement is made; and if he will make a statement on the matter. [17824/19]
View answerThis question is on a similar theme but on the previous point, if the guidelines are too loose they will be a waste of time. My advice to the Minister is that he should not go down that road.
With regard to some specific issues in the insurance area, what policyholders have found in many instances is that claims have been settled behind their back. They are often claims they did not even know had been made against them and their policy. That is simply not good enough. There have been cases where the policyholder felt they could successfully have defended those claims yet they have been settled because the insurance company did not want to take the risk of going to court. When will that specific issue be dealt with?
I propose to take Questions Nos. 43 and 62 together.
My Department is currently working on developing legislative changes that would oblige insurance companies to inform policyholders of claims made against them. The objective of the proposal is to ensure that policyholders are informed as soon as possible after a claim against their policy is lodged and informed after a claim is settled. In addition, the proposal will seek to require insurers to engage with the policyholder to ensure the policyholder’s views are taken into consideration.
The proposal originates from Recommendation 8 of the Report on the Cost of Motor Insurance. A corresponding recommendation was then included in the Report on the Cost of Employer and Public Liability Insurance, Recommendation 10, as this issue is generally far more relevant to businesses and other liability insurance policyholders than individual motorists. The proposal seeks to include within the scope of the changes small businesses which have an annual turnover of €3 million or less.
The Department engaged with Insurance Ireland to seek voluntary agreement of this proposal through a protocol. Unfortunately, no such agreement could be reached on a non-legislative basis.
As a result, it is proposed to include the legislative proposal within the Consumer Insurance Contracts Bill 2017, a Private Members’ Bill which is based on a 2015 Law Reform Commission report. The Government provided support in principle for the objectives of this Bill on Second Stage and noted the intention of the Minister for Finance to submit substantive amendments should the Bill reach Committee Stage.
This proposal is now being developed as a Committee Stage amendment, the specifics of which are dependent on approval from the Office of the Parliamentary Counsel.
The reason the legislative changes are not being drafted as part of a new, separate Bill is because the Minister and I see the Consumer Insurance Contracts Bill as an ideal vehicle for addressing insurance consumer-related issues such as this from an efficiency and effectiveness perspective. In addition, as all parties have worked very constructively together on important insurance legislation such as the Insurance (Amendment) Act 2018, and the Central Bank (National Claims Information Database) Act 2018, I see no reason this constructive engagement cannot continue.
I would like the Minister of State to indicate who would not agree to provide for this on a non-legislative basis in order that policyholders might be told of claims made against their policies. That is so dispiriting. This recommendation dates back to January 2017 and Insurance Ireland was to have had a general protocol in place by the end of that year. This did not happen and then the next report referred to legislative change. If we cannot get to a point where insurance companies tell policyholders that claims have been made against them and ask them whether they have anything to say in that regard or any defence to put forward - and whether the company can see the evidence - then in what direction are we moving?
Policyholders are still not even told in their renewal notices what premiums they paid in the previous year. I got my car insurance quote recently and there was no information on what I paid last year. I had to contact the insurance company to check. That is a joke. We are talking about data and transparency, yet simple information that would allow consumers to make more informed and better decisions continues to be withheld from them. That is not good enough.
I will read the relevant section of the reply again; it is pretty clear. It states, "The Department engaged with Insurance Ireland to seek voluntary agreement of this proposal through a protocol. Unfortunately, no such agreement could be reached on a non-legislative basis." Insurance Ireland represents the main insurance companies. We were unable to agree on the recommendation from the motor report and the employer liability and public liability report. That is the answer to the question.
I thought it would be particularly easy for somebody to be able to see the quote from the previous year listed three or four lines above this year's quote. The Deputy heard me cite my own business as a dairy farmer, for which I have multiple insurance policies, and the fact that I am obliged to search the file from the previous year in order to find information on the premium I paid. This is the easiest and most transparent way to proceed, and it would cost nothing. However, we have to go through a certain process in this regard and it will be done within the next month.
That is pathetic. It has taken two and a half years for the most basic reform to be introduced in order that consumers will be informed, via their annual renewal notices, what they paid last year and what they are being asked to pay this year. It has taken that amount of time to have that level of basic information provided to consumers. I feel sorry for the Minister of State at times in trying to deal with this. It is a joke that it was not possible to reach agreement with the insurance industry on a protocol requiring its members to inform policyholders that claims were made against them and to inform them subsequently how those claims were dealt with, namely, whether they settled, the amount of the settlements involved and so on.
I am not afraid to call out the insurance industry either when I think it is wrong. It is depressing that such a simple reform could not be agreed on a voluntary basis and that we have to go down the road of legislating in order to give consumers the most basic information, to which they are entitled and should be provided as a matter of course.
This issue highlights the battle with the insurance industry. This is something that should be have been dealt with and should never have had to emerge in a report. That report has been in existence for two and a half years. This is about transparency. We will have the industry representatives before us again. One would swear butter would not melt in their mouths when they are sitting across from us at the committee, where they are all about transparency and are consumer-centric and all the rest. We have seen the cut of them. We have seen how they fought the Minister of State in this regard for the past two and a half years. The legislation I introduced passed Second Stage two years ago. I had a commitment from the person who was in the Minister of State's position previously that it would go through the committee in a matter of months. However, despite being designed to give consumers more rights vis-à-vis the insurance industry, the Bill has been stalled for two years due to the requirement for a money message from Government. That said, I am glad the Minister of State is going to use this legislation as a vehicle to deal with the issue. I was somewhat concerned when the Department put the legislation out for consultation last week, with a six-month window for said consultation.
It is six weeks.
Sorry, a six-week window. This means that it is unlikely the legislation will be before the committee prior to the summer recess. I am very disappointed with that because I thought we would be dealing with it straight after Easter.
I want to clarify that, in regard to the previous year's premium, when I came into this position, I was the one who was pursuing that. It has not been in train for 30 months but rather 15. That is how long it takes to get something through these processes in order to improve transparency for consumers.
I have not spared the insurance companies where I think they have not acted in a fair and reasonable manner towards their clients - their customers. These clients purchase products from those companies. It has been difficult on occasion to try to get improved transparency from the companies, and I have made that point before. As I see it, the biggest issue with the insurance companies is that the customer does not come first; he or she comes last. That is a terrible position for customers to find themselves in vis-à-vis the companies from which they purchase products. The consumer does not come first; the consumer comes last.
The Deputies will have seen that I have proposed the establishment of an insurance culture board similar to the Irish Banking Culture Board. It is something that badly needs to be reconfigured. On too many occasions, Irish consumers do not come first with the companies with which they contract. Without their customers, the insurance companies do not have a basis for their business.
