Vol. 553 No. 2
88 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment the precise action she intends to take to implement the recommendations of the Motor Insurance Advisory Group; and if she will make a statement on the matter. [13871/02]
An agreed Programme for Government contains a commitment to implement the recommendations of the Motor Insurance Advisory Board. The implementation group which was set up at the end of April 2002, is making good progress on the preparation of an action plan to give effect to the 67 recommendations. The action plan, which I intend to make publicly available, will contain a target timeframe for the implementation of the recommendations.
It took the previous Government five years to notice that there was a problem with insurance. I know that the Tánaiste and other Members were being regularly lobbied by young people and business interests. Lo and behold, the report of the Motor Insurance Advisory Board, which took three years to compile, was published a couple of weeks before the general election. The timing could not have been better from a political point of view but young people and business people must suffer on due to the failure to face up to the vested interests. Is the Tánaiste aware that in 2001 the annual insurance premium for a typical grocery and electrical shop rose from €21,000 to €31,000? Is she aware that small businesses in the construction sector must pay enormous increases in premia from €14,000 in 2001 to €38,000, for employer's and public liability insurance? Is she aware that a 20 year old male driver seeking insurance for the first time could pay up to €6,000 for third party, fire and theft cover? These are the realities.
The Deputy must ask a question.
Is the Tánaiste aware that there is a 35% increase in premia for household insurance although cover is being reduced? What timescale is the Tánaiste setting for the implementation of this report's key recommendations? She stated recently that she intends to tackle some of the professional groups, particularly the legal profession, which are contributing to the high cost of insurance. Can the Tánaiste give some hope to young people seeking their first motor insurance cover?
I am aware of the interesting statistics quoted by Deputy Hogan but the subject of the question is motor insurance. Nobody who lives in this country could be unaware of the prohibitively high cost of motor insurance for all drivers but particularly for young people. It is a fact that the number of fatalities on the roads relative to the number of cars halved in the period 1990 to 2000 but insurance increased by 57% and rose by 18% in 2001 alone. Notwithstanding some of the changes made in the past such as the abolition of the two senior counsel rule and jury trials, there was still no visible effect on the cost of premiums.
I reiterate that this issue is my political priority in the Department and, in so far as I can drive this agenda politically, I intend to do so over the coming months. I had a long meeting yesterday with all the relevant officials in my Department and I hope to be in a position to publish the targeted timeframe in September or October after I have presented it to Government in early September.
Deputy Hogan is correct that this is not just an issue of motor insurance; there are wider implications and huge changes which must be made across various Departments. Of the report's 67 recommendations, 17 relate to the Department of Enterprise, Trade and Employment, so this agenda must be driven across Government if we are to achieve fundamental change. I expect to see the long-promised quid pro quo from the insurance companies when we introduce the changes. I hope to establish the PIAB on an interim basis very quickly, pending the passing of the legislation in the House. The companies must then provide a clear and visible quid pro quo for consumers.
There is a rumour that general insurance companies are no longer happy to trade in the Irish market and could decide to pull out if action is not taken by the Government to deal with the issues elucidated by the Tánaiste. Does the Tánaiste believe that a cartel is operating in the insurance business in Ireland, particularly in motor insurance, because of the small number of companies willing to quote in this jurisdiction? What measures would the Tánaiste be happy to see implemented in the motor insurance industry by the end of her term of office?
The Government can do a number of things but societal changes are also required. The compensation culture is extraordinary. We all know that the person who can get an easy €5,000 or € 10,000 compensation is regarded as a hero in the workplace. We must root out the "compo culture". There are some immediate steps which can be taken. I have been in contact with the Office of the Attorney General in order to draft regulations which will require insurance companies to give customers at least 15 days notice of the cost of their premium and details of the no claims bonus so that the consumer can then shop around. If notice of the premium cost is given on a Friday and the insurance is due on a Saturday or Sunday, then clearly the consumer does not have many options.
There are only four companies quoting for motor insurance in the country.
I understand there is only one company in the entire world which provides insurance for car hire. We have huge issues to deal with in order to create a more competitive market. We must get rid of some of the inefficiencies in regard to claims and devise a simpler method for making claims.
Is the Tánaiste getting rid of her Minister?
I do not think he is going to Europe, Deputy Rabbitte.
I bet he is not going back to insurance.
