At the outset, the Deputy should note that I am responsible for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the price or the level of cover to be provided to motorists.
As the Deputy is aware, the Cost of Insurance Working Group was established in July 2016 and undertook an examination of the factors contributing to the increasing cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses. The initial focus of the Working Group was the issue of rising motor insurance premiums and as part of that exercise, there was and has been extensive interaction with the insurance industry and its representative bodies. The Report on the Cost of Motor Insurance was published in January 201 and makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an Action Plan. In January 2018, the Working Group published the Report on the Cost of Employer and Public Liability Insurance. This Report makes a further 15 Recommendations with 29 associated actions. While this Report is focussed on addressing issues linked to business insurance, the implementation of recommendations from both reports will have a positive impact for all consumers and businesses including motorists.
There has been significant work to date in implementing the recommendations of the two aforementioned 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;
- 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 recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee , which targets insurance-related criminality.
I believe that these reforms 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).
Undoubtedly the single most essential challenge which must be overcome if there is to be a further sustainable reduction in insurance costs for motorists is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. In this regard, the Personal Injuries Commission has highlighted the significant differential between award levels in Ireland and other jurisdictions, and has made a number of recommendations to address this issue, in particular the establishment of a Judicial Council to compile guidelines for appropriate general damages for various types of personal injury.
It should be noted that 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 members of both Houses of the Oireachtas can collectively work together to ensure that the Judicial Council Bill is enacted by the summer.