Dáil Éireann díospóireacht -
Wednesday, 27 Mar 2002

Vol. 551 No. 3

Written Answers. - Personal Injuries Assessment Board.

John Bruton

Ceist:

84 Mr. J. Bruton asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will assist the small and medium business enterprises which are paying increasing insurance premia by establishing a personal injuries assessment board, commencing with a review of the injury litigation to increase efficiency, referral of any further mergers within the insurance industry to the director of competition, the creation of an environment which encourages international competition to underwrite Irish insurance, and a review together with the Minister for Justice Equality and Law Reform of the introduction of judicial guidelines to give greater consistency to award levels; and if she will make a statement on the matter. [10594/02]

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

Research conducted for this Department has shown that insurance premiums are high in Ireland mainly due to the number and level of compensation awards to policyholders. The costs of delivery of compensation run at approximately 40% of the cost of claims.

The Government has decided to establish a personal injuries assessment board, PIAB, with a view to reducing the costs of delivery of compensation in personal injuries cases. It is expected the PIAB will, in time, substantially reduce the number of personal injury claims being brought to court, thus reducing the legal and other costs involved in the delivery of personal injury compensation. It is also expected that the PIAB should bring about a more consistent settlement of claims that would be fairer to claimants generally.

Work on the establishment of the PIAB is in progress. I await the report of the interdepartmental implementation group that was set up to progress the establishment of the PIAB so that the board may be set up as quickly as possible.

With regard to further mergers within the insurance industry, it is intended that responsibility for merger control, except in the media sector, will be transferred to the Competition Authority in accordance with the Competition Bill, when enacted. It should be noted that large scale mergers involving significant international players and which impact across the EU are generally required to be notified to the EU Commission under EU merger regulation.

Since the transposition into Irish law of the EU third framework insurance directives in 1994, insurance companies authorised in any one member state may provide insurance cover throughout the EU on the basis of their home country authorisation. This has opened up the Irish market to competition from insurance providers in other EU countries. I have encouraged such competition. For this reason also, I welcome a number of initiatives being taken by the EU in its financial services action plan. In addition, the removal of the "cap" on brokers' commission will encourage further competition in the Irish market.