asked the Minister for Industry, Trade, Commerce and Tourism and steps he has taken to improve the monitoring and supervision of insurers operating in the general insurance market; and if he is satisfied that these insurers are making adequate provision to cover all their liabilities and if they are in a position to offer reasonably priced insurance cover to all sectors.
Ceisteanna — Questions. Oral Answers. - General Insurance Market.
32.
As I stated in reply to a similar question from the Deputy on 13 June 1985, the function of supervision is a continually developing and changing process to match developments and changes in insurance practice, both locally and internationally, and in line with the development of better monitoring techniques.
On that occasion, I instanced several changes in monitoring procedures implemented over the previous ten years and further plans in the pipeline. It is not necessary to repeat those here. Since then, however, some further developments have taken place. For example, I have obtained sanction for the appointment of two actuaries and their recruitment is being pursued with my colleague, the Minister for the Public Service. Meanwhile, of course, independent actuarial expertise is engaged as required. A programme for the computerisation of the supervisory function has also been advanced and this new facility is due to be installed during this year. Administrative staff numbers have increased with five additional officers having been assigned to this function since last June.
A review of the supervisory procedures used by the Department in non-life insurance has just been completed by consultants. This review has endorsed the methods used to date and has recommended a number of detailed developments of these procedures which will be implemented in conjunction with the new computer system.
Additionally, the Government recently approved the heads of a Bill which is intended to add to and reinforce the Minister's supervisory functions in relation to insurance undertakings in the State. I am also, of course, concerned that the primary responsibilities of directors and managers of insurance companies and the duties of auditors should be properly exercised and the proposed Bill will also address this.
There are 41 non-life companies authorised to conduct general — or non-life — insurance business in Ireland. All companies are required to make returns in the statutory form to my Department and these are rigorously examined with a view to assessing the financial position of the insurers, including the adequacy of reserves for liabilities. Any questions arising out of these examinations are pursued by the Department with the companies concerned with a view to ensuring their soundness. I am satisfied that this process is being conducted satisfactorily.
In relation to the price of insurance cover, while I recognise that there have been some difficulties both with regard to the cost and availability of certain types of insurance, I am satisfied that, in general, the premium rates charged are necessary for the continued carrying on of business by insurers on a viable basis. It should be remembered that increases in the level of premiums charged reflect the significant underwriting losses being incurred by insurers as a result of the high level and cost of claims. I am hopeful that measures currently being taken, including the enactment of the recently published Bill to modify the right of access to decision by jury on the extent of damages in personal injury cases will help to curb the cost of claims. Of course, improved safety precautions in the workplace, safer driving, greater security in the home, etc., are also important factors to be looked at if the cost of claims is to be contained.
How many insurance companies are at present writing general insurance?
Forty-one, non-life.
When does the Minister propose to appoint actuaries to his Department?
I cannot give the Deputy a specific date in that regard, but I would imagine that it would be fairly soon. I shall send the Deputy a note on the matter.
Is the Minister aware that certain insurers are not prepared to quote insurance for certain areas in the city?
I am aware that for certain liability risks certain insurance companies are not prepared to offer rates. At a recent public dinner, I called on the insurance industry to ensure that they provide cover. It is their duty to provide cover in this country. As I have said on a number of occasions, I do not have the legal power to force insurance companies to make offers of cover to clients. I have a supervisory authority and a responsibility to ensure that insurance companies remain viable and that is my primary concern.
Finally, the Minister admits that insurers are not prepared to write cover for certain areas in the city.
Certainly.
Is the Minister aware that in the absence of insurers living up to their responsibility, protection rackets are operating in this city?
I am concerned——
Is the Minister aware?
——that certain companies are not offering cover for certain liabilities. I brought this to the notice of the companies and have warned them in this context and in the context of the freedom of services draft directive which is in negotiation in Europe. The Irish insurance industry have an obligation to the Irish market and if they do not live up to it, I shall have to examine the situation in depth.
What about the protection rackets? Will the Minister move to stop these?
If the Deputy refers that matter to the Minister for Justice, I am sure he will take action.
Because of the fact that I have had Question No. 20 down for the past three occasions on which the Minister answered questions under this heading and it failed to be reached, I should like to raise it on the Adjournment.
I shall communicate with the Deputy. That concludes Question Time.