I no longer have responsibility for insurance undertakings. From 1 May 2003, the Irish Financial Services Regulatory Authority, IFSRA, is responsible for practically all of the financial services industry, including the registration and supervision of insurance undertakings and the services provided by them. However, I retain responsibility for the insurance reform programme.
I am pleased to report that the insurance reform programme that I announced on 25 October 2002 is progressing well. This programme comprises a comprehensive set of interrelated measures designed to improve the functioning of the Irish insurance market. The key measures include the implementation of the recommendations in the motor insurance advisory board action plan within a target timeframe. To date, 32 of the recommendations have been fully implemented, three have been partially implemented and work is in progress on the implementation of the other recommendations.
The Personal Injuries Assessment Board Bill 2003 completed its passage through the Houses of the Oireachtas on 19 December 2003 and was signed into law on 28 December 2003. The Act will commence in early to mid-2004 providing for the establishment of the personal injuries assessment board on a statutory basis and allowing the board to deal with cases.
My Department and the Competition Authority undertook a joint study into the insurance market. The study will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. A significant amount of the work was completed in 2003 and a report will be produced in the near future.
I chair a ministerial committee established to drive the co-ordinated implementation of the reform programme across the relevant Departments and other concerned bodies. Substantial progress is being made on a range of measures that will radically overhaul the functioning of the insurance market and help tackle the high cost of insurance. These include measures to reduce the number of accidents, to tackle fraudulent and exaggerated claims and streamline the law in regard to personal injury claims. Many of the measures contained in the MIAB recommendations will have the effect of encouraging competition, including those relating to transparency and the provision of information to consumers. A number of these measures have already been implemented.
The pricing and underwriting of insurance is a matter for individual insurance companies and EU law prevents Governments from intervening in regard to the matter of premium levels or in respect of what risks they are prepared to underwrite. Insurers generally make decisions about whether they are prepared to quote for a particular risk, and if so, at what premium level, based on their underwriting experience or assessment of that risk in the market. Governments are free to take action, which affects the operation of the insurance market.
I consider there to be an onus on the insurance industry to ensure that the measures the Government is putting in place to reform the Irish insurance market will have the effect of significantly reducing the cost of premia to consumers and businesses. It is heartening to report that a number of insurers have already announced reductions of 15% to 20% in motor and more recently public liability premia. As implementation of the reform programme continues, I expect reductions to occur in all forms of insurance.
I am also confident that these measures will attract new players into the market and lead to further downward pressure on premia, as improvements in the functioning of the Irish insurance market make it more attractive to other firms that do not have any previous presence in Ireland. I am keen to encourage such insurers to enter this market, and over the coming months, I intend to meet representatives of potential new entrants to the market. I have made it known that I am interested in talking to any such potential entrants.