Dáil Éireann díospóireacht -
Tuesday, 30 Nov 1999

Vol. 511 No. 6

Written Answers. - Insurance Industry.

Bernard J. Durkan

Ceist:

84 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the extent, if any, to which she will regulate or improve the motor and public liability insurance industries with particular reference to consumer protection; and if she will make a statement on the matter. [25048/99]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

The Deputy will be aware that EU legislation, the effect of which is to open EU markets, including the Irish market, to competition from insurance providers based throughout the EU, is in force in Ireland since 1994. In addition, the Deputy will be aware that I have recently removed the cap on brokers' commission in an effort to encourage further competition in the Irish market. Nevertheless, the level of insurance premiums, especially in the areas of public liability and motor, are still high enough to give concern.

The Deputy will be aware that there has been extensive examination of the factors contributing to the relatively high level of premiums focusing on a number of the key cost elements including the levels of personal injury compensation and the costs associated with settling compensation claims. Concurrent with this examination efforts are being made to identify measures which both individually and cumulatively could have a moderating effect on insurance costs.

The 1996 Deloitte & Touche report on the economic evaluation of insurance costs found that the main contributory factors to rising premium costs were the high legal costs component of small claim settlements; the faster rate of medical cost inflation and the high level of general damages awards relative to special damages in smaller claims. Following consideration by Government of the Deloitte & Touche report, a special working group was established to advise on the establishment of a personal injuries tribunal and to examine issues surrounding alternative systems of personal injury compensation in operation in other jurisdictions. The special working group completed the first part of its remit in 1998 and recommended a structure for a voluntary mediation system for occupational injuries which could be operated within the reformed courts system. It will present its second report shortly. In the light of their reports and after consultations with the new Courts Service, follow up to the group's report will be considered.

In addition, I re-established the motor insurance advisory board last year to provide information and advice on trends in motor insurance costs and with policy recommendations for addressing those costs.

Apart from Government initiatives, greater attention to safety in the workplace and on the roads can further reduce insurance costs. Accordingly, last year I launched the voluntary code of practice adopted by the initiative on workplace safety group established in May 1996, a group representing the key players in the area of accident prevention and claims mitigation chaired by IBEC, with representatives from the Department of Enterprise, Trade and Employment, ICTU, the Health and Safety Authority and IBEC. Also a number of initiatives are in place and are being taken to improve driving standards and safety awareness among all drivers including young drivers. The Irish Insurance Federation, in conjunction with the Driving Instructors Register, has introduced a scheme of insurance premium discounts for the young driver on completion of a required number of driving lessons. The National Safety Council, in co-operation with the gardaí, continue to promote anti-speeding and anti-drink driving media campaigns including road safety educational programmes for secondary school students.