Wednesday, 19 June 2019

Questions (48)

Fiona O'Loughlin


48. Deputy Fiona O'Loughlin asked the Minister for Finance when the working group on the cost of insurance will complete its work. [25413/19]

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Written answers (Question to Finance)

I am very conscious of the difficulties that the cost and availability of insurance are having on many businesses, charities, community groups, sporting clubs and other groups in this country and can understand the frustration that many people have with the existing position.  Unfortunately, there is no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises.  This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of businesses seeking insurance.

Notwithstanding this, I wish to re-emphasise how important this issue is for the Government. Consequently, following the publication of its Report on the Cost of Motor Insurance in 2017, the Cost of Insurance Working Group undertook an examination of the employer liability and public liability insurance sectors.  This second phase culminated in the publication in January 2018 of the Report on the Cost of Employer and Public Liability Insurance.  I believe there has been significant progress already in the implementation of the two reports, including the following:   

- the establishment of the Personal Injuries Commission, and its subsequent recommendations relating to addressing award levels for soft tissue injuries – this has provided the objective evidence we need to be able to address award levels;

- the establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance; the Central Bank is currently reviewing the possibility of expanding is scope to cover business insurance;

- reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019;

- amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;

- the reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers; and,

- various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the launch recently of Operation Coatee, a co-ordinated operation to tackle insurance fraud.  

The Deputy will be aware that both Reports contained Action Plans with timeframes for the implementation of Actions associated with the Recommendations.   I would note that this timeframe expired at the end of 2018 with regard to the Motor Report and is due to expire at the end of 2019 with regard to the Employer and Public Liability Report.  I would like to assure the Deputy that the Cost of Insurance Working Group will continue to focus on implementing the outstanding recommendations in both reports and it is hoped that this can be achieved by the end of this year.

In this regard, I consider that bringing the levels of damages awarded in this country more in line with those awarded in other jurisdictions is undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs. Work is progressing as a matter of priority on the Judicial Council Bill, and it is due to complete Report and Final Stages in the Seanad this week, prior to being submitted to Dáil Éireann shortly thereafter.  I would hope that we can collectively work together to ensure that the Judicial Council Bill is enacted by the summer.

Alongside this, the Law Reform Commission commenced its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform.  As everybody in this House will be aware, this is a complex task and appropriate consideration has to be given to the constitutional implications of such an exercise.

In conclusion, I believe that the reforms implemented to date are having a significant impact with regard to private motor insurance (CSO figures from May 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak).  The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.