Vol. 558 No. 6
6 Mr. Costello asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress made to date with regard to the implementation of her action plan for the insurance industry; the timetable for the implementation of the different elements of her plan; if she intends to take steps in the meantime to deal with the escalating cost of insurance; and if she will make a statement on the matter. [24860/02]
Some recommendations contained in the action plan to give effect to the recommendations of the Motor Insurance Advisory Board have been implemented.
Is the Minister taking more than one question, as a number of related questions have been tabled?
No and I do not know why.
It would facilitate us if the Minister did, as it would increase the time available for other questions.
The Deputy can take it a similar reply will be provided to the other questions.
There are six minutes for this question and it should not be wasted.
The timetable for implementation of the 67 recommendations is contained in the action plan, which I published on 25 October last. I intend dealing with the escalating cost of insurance through the insurance reform programme, which I announced at the end of October and which is designed to improve the functioning of the insurance market. It is the responsibility of the insurance industry, as a quid pro quo, to introduce cost reductions in premia for consumers.
One of the key recommendations was the establishment of a ministerial committee on insurance, chaired by the Minister. How many times has the committee met? How many of the 67 proposals in the MIAB report have been acted on?
The committee will have its first meeting next week. The reason for that is a great deal of preparatory work has had to be undertaken by the officials involved to make sure the meeting is meaningful. Much of the reform involves the Ministers for Justice, Equality and Law Reform and Transport. The recommendation on renewal notices has been implemented and the penalty points system is in place. The insurance companies themselves have implemented some recommendations but the timeframe for the implementation of all the recommendations is the middle to end of next year. By this time next year I hope the vast majority of the recommendations will be in place.
Will the Minister agree to an independent examination by an Oireachtas committee of the proposal to establish a personal injuries assessment board? My concern is that we may drive up a blind alley and I am not sure whether it is a good idea. There is a danger it might be a bad idea as it could add to the cost of insurance. No cost benefit analysis supports the case for a PIAB. The only economic analysis has been conducted by Dr. Peter Bacon, who has suggested the cost of claims and, therefore, the cost of insurance will be higher if such a board is established.
I make a plea to the Minister to have the issue examined by an Oireachtas committee and the heavyweights from the interim board, the Law Society, the Bar Council and the Irish Insurance Federation, can be brought before it. If the proposal stands up to rigorous scrutiny I will run with it but, in the meantime, I remain a sceptic. I emphasise that I am a non-practising lawyer. There are dangers in this proposal that have not been adequately examined and if it stands up to scrutiny I will support it. However, until it does I consider it a dangerous course of action to follow.
The PIAB is only one minor part of the overall solution to the problem. If it was not accompanied by the other reforms, it could add to the cost of insurance, as the Deputy suggested, and make it easier for people to make claims. All paper-based systems have such potential. I have no problem with an Oireachtas committee examining the proposal but we are proceeding with it. We have set up an interim board and a great deal of work has been done by Dorothea Dowling and her colleagues in preparation for the establishment of the board on a statutory basis. I do not accept it will add to the cost because, if it did, we would not proceed. Without the other reforms, the proposal could not succeed on its own.
I accept the Deputy's bona fides, notwithstanding his professional background, and I am aware the legal profession has raised significant objections. However, a non-court based procedure for the settlement of claims, 40% of the cost of which is accounted for in professional fees, would be more successful and less expensive.
Does the Minister accept the abolition of jury decisions on awards, as a result of which a reduction in costs was promised, did not materialise? There is cross-party desire to prioritise this issue. Will she circulate a copy of the action taken to date on each of the 67 recommendations in the MIAB report to the Opposition spokespersons? Will she outline the membership of the ministerial committee that she will chair?
Should the information on penalty points accumulated by the Department of Transport be passed on to insurance companies? Does she agree that is right in terms of how it will impact on the consumer? Is she confident there will be a 31% reduction in insurance premia in the timeframe outlined?
I appreciate the cross-party support for the reform measures as this issue goes way beyond politics. We are all agreed, as consumers and residents, on the urgent need to take action in this area. I will circulate the information on the action taken to date and it might be a good idea for the spokespersons to meet Dorothea Dowling and some of my officials. I have an ongoing relationship with her and I will arrange for that to happen.
I agree with Deputy Howlin that when the use of juries and two senior counsel were abolished fees were doubled and the junior counsel was paid two thirds of the senior counsel's fee, thus resulting in increased costs.
The costs were driven by the insurance companies.
No, the legal lobby in the House had a significant part to play.
The Minister, without interruption.
That is why we must make sure the court becomes a last resort under these reforms and every effort is made to resolve claims outside it. The court should only decide liability.
Absolutely.
The assessment of how much a broken leg is worth could be undertaken more successfully by others.
Constitutionally, the Minister cannot deny people access to the courts.
There is no question of denying people access to the courts. We are providing another more informal and less expensive option.
We are trying to deny lawyers access to fat fees.
With regard to Deputy Hogan's question, the penalty points system is having a significant effect in terms of motoring behaviour and that will impact on the number of accidents. It is encouraging that is the case. I cannot put my hand on my heart and give guarantees that more players will enter the insurance market. At the end of the day competition will drive down costs and our feedback is that no new players will enter the current market because it is unsatisfactory.
The members of the committee are the Ministers for Justice, Equality and Law Reform and Transport and myself.
What about the question relating to the forwarding of information on penalty points to insurance companies?
