Dáil Éireann díospóireacht -
Thursday, 12 Oct 1995

Vol. 456 No. 8

Written Answers. - Insurance Costs.

Noel Ahern

Ceist:

71 Mr. N. Ahern asked the Minister for Enterprise and Employment the action, if any, he will take with the insurance industry, who are nullifying the efforts of various Government Agencies in attracting employment by quoting ridiculous figures for employers and public liability; his views of a service industry (details supplied) for which demand exists with no local competitors, where contractors must come from Northern Ireland and the United Kingdom and where local operators cannot get off the ground because of quotations, which in one case was 70 times the rate in the United Kingdom; and if he will make a statement on the matter. [14806/95]

Minister for Enterprise and Employment (Mr. R. Bruton)

My primary role in relation to the insurance industry is to supervise the statutory reserves and solvency requirements of insurers authorised to do business in Ireland and to ensure that sufficient funds are available to meet claims as they arise. In order to ensure that those requirements are met, insurers must be free to set their premium rates in the light of their underwriting experience.

In the case of a particular business, such as the service activity to which the Deputy referred, quotations would also take into account the high risk nature of the work involved and the experience and safety record of the company seeking insurance cover.

A variety of measures both legislative and otherwise have and will be taken to endeavour to reduce insurance costs and these include the following: establishment of the Health and Safety Authority with responsibility for all aspects of occupational health and safety. The authority recruited a number of additional inspectors to facilitate the enforcement of health and safety at work legislation; the provisions of the Courts Act, 1988, which abolished juries in personal injury cases; the provisions of the Courts (No. 2) Act, enacted on 16 July 1991, increasing the jurisdiction of the Circuit Court which should in the long term reduce legal costs and delays in settling claims; an initiative included in the proposed Courts and Court Officers Bill giving the Superior and Circuit Courts Rules Committee the power to make rules requiring parties in High and Circuit Court personal injury actions to disclose, without having to apply to court, the reports of experts, such as doctors, whom it is intended to call to give evidence. This will speed up the hearing of actions and is aimed at reducing legal costs for litigants; the ongoing programme to update the road network.

The level of commitment by employers and employees to safety procedures will be a key factor in reducing the frequency and cost of claims and, ultimately, lowering liability premiums. IBEC has embarked on a safety campaign among its members designed to reduce the level of accidents in the workplace and to reduce the level of employers' liability insurance claims.

As previously indicated, I have commissioned a detailed economic evaluation of insurance costs in Ireland and of the key factors contributing to the high cost of insurance here. I expect to have the consultants report in November and, on the basis of the recommendations made in that report, I propose to bring forward a package of measures aimed at reducing the burden of insurance costs on the economy.

This ministerially commissioned study will not be concerned with validating the results of the surveys undertaken to date; it is intended to be a root and branch analytical examination of insurance cost levels in Ireland compared to other relevant economies; the source of higher costs in Ireland; the cost penalty which higher insurance costs imposes on the economy here and the need for appropriate and realistic measures to bring costs in Ireland into line with insurance costs in other relevant economies.