Dáil Éireann Debate, Thursday - 28 April 2022
62. Deputy Niamh Smyth asked the Minister for Finance his plans to implement reforms in view of the increasing cost of insurance premiums; the latest discussions his Department has had on this issue; the bodies or organisations that the discussions have taken place with; and if he will make a statement on the matter. [16927/22]
View answerInsurance reform is a key priority for this Government as identified in the Programme for Government and reflected in the Action Plan for Insurance Reform which was published in December 2020. Furthermore, the Cabinet Committee Sub-Group on Insurance Reform is overseeing the implementation of this reform agenda, and meets regularly in this regard. The Action Plan sets out 66 actions to protect consumers and improve the business environment; introduce more competition into the market; prevent fraud and reduce the burden that insurance costs represent on business, community and voluntary organisations. I would note that the second Action Plan Implementation Report published this March this year showed that reform is progressing well, with some 80% of actions in the Plan now being delivered and the remaining initiated. It is my hope that the cumulative impact of these reforms will be to improve both the cost and availability of insurance for consumers, businesses, and community, voluntary and sporting organisations. Some of the key achievements of the Action Plan to date include:
- implementation of the Personal Injuries Guidelines to replace the Book of Quantum;
- introduction of Regulations to ban on price walking for home and motor insurance, commencing on 1 July;
- establishment of the Office to Promote Competition in the Insurance Market within the Department of Finance;
- publication by the Central Bank of its National Claims Information Database Report on employer and public liability insurance, and the completion of its Review on Differential Pricing in the motor and home insurance sectors; development of legislative proposals to enhance and reform the role of the Personal Injuries Assessment Board (PIAB);
- enactment of the Criminal Justice (Perjury and Related Offences) Act 2021, which places perjury on a statutory footing for the first time; establishment of an ‘Insurance Fraud
- Office’ within the Garda National Economic Crime Bureau, and
- introduction of new regulations on solicitors advertising.
The remaining priority actions for completion include: reforming the law on occupier’s liability to rebalance the duty of care (Occupiers’ Liability Act 1995);
- enhancing the enforcement powers of the Competition and Consumer Protection Commission (CCPC) through the Competition Amendment Bill;
- progressing legislative proposals to reform the PIAB; and,
- reducing insurance fraud, including by introducing revised guidelines for reporting insurance fraud.
Although not included in the Action Plan, the Insurance (Miscellaneous Provisions) Bill 2022 is continuing to progress through the Oireachtas. Planned to be enacted this summer, it will support further policy development that is evidence-based and tailored to the specific circumstances in the Irish market. It is a pro-consumer piece of legislation, and will enhance transparency in this important sector. It is my hope that it can be passed through the Oireachtas without delay. In terms of engagement, there has been ongoing engagement with industry – both individual insurers and Insurance Ireland – on an ongoing basis. Minister of State Fleming has met individually with the CEOs of the eight main insurers in the Irish market, twice following the adoption of the Personal Injuries Guidelines, in order to hold them to account on their commitments to pass on all savings from the insurance reform agenda to customers. In these meetings, and during his ongoing engagement with industry, Minister of State Fleming has consistently stressed the importance of insurers reflecting lower claims costs through reduced premiums, and the need for insurers to respect the Guidelines by not settling for amounts that are inconsistent with them. These engagements have been positive, with insurers confirming again recently that they are committed to passing on savings from the Guidelines, and are adhering to them in their direct settlements. During these meetings, Minister of State Fleming also impressed upon insurers the need to expand their risk appetite into ‘pinch-point’ sectors that are experiencing issues with availability and affordability of cover, particularly high-risk/high-footfall areas. Another development of the Action Plan for Insurance Reform was the creation of the new Office to Promote Competition in the Insurance Market within the Department of Finance. The role of the Office, which is chaired by Minister of State Seán Fleming, is to assist in reducing insurance costs by promoting competition in the Irish insurance market. Since its establishment, the Office has held over 70 meetings with a wide range of key stakeholders, including representative bodies, providers and other civic society groups, to understand the gaps in the Irish insurance market. The Office has been working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials have developed a customised proposition for potential market entrants and have identified a shortlist of specific targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market. Finally, on the issue of premium prices, I would note the Central Statistics Office’s most recent Consumer Price Index data shows continuing decreases in the price of motor insurance. Motor insurance prices are now 40.0% lower than their peak in July 2016. I believe that we need to look at the price reductions in the context of the Government’s overall reform strategy. Work remains ongoing across Government to deliver these elements of the Action Plan, and to expand these price reductions into other types of insurance.
