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Motor Insurance Regulation

Dáil Éireann Debate, Thursday - 29 September 2016

Thursday, 29 September 2016

Ceisteanna (1)

Michael McGrath

Ceist:

1. Deputy Michael McGrath asked the Minister for Finance if he will provide an update on the work of the task force in his Department examining the spiralling cost of motor insurance; when the task force will report; if he is committed to implementing its recommendations; and if he will make a statement on the matter. [27795/16]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte)

I am seeking to put the spotlight on motor insurance premiums again. I thank the Minister for his work on the task force. I am seeking an update on that work in terms of the meetings that have been held, whether progress is being made and the timeline for the completion of its work and the implementation of recommendations. Is the Government committed to bringing forward recommendations, be they legislative or otherwise, to try to deal with the underlying causes of the out-of-control spikes we see in motor insurance premiums?

The cost of insurance working group, which I chair, is undertaking a review of the factors which are influencing the increased cost of motor insurance.

The working group brings together all the relevant Departments and offices involved with the process. Its objective is to identify immediate and longer-term measures which can address increasing costs while bearing in mind the need to maintain a stable insurance sector.

The core areas to be examined by the working group in this first phase are: the motor insurance sector generally, at present and in recent years; the effects of legal costs and litigation processes on insurance costs; the current claims compensation arrangements and the cost of claims; insurance data and information; the impact of accident rates; the impact of unlawful activity on the insurance sector; and other market issues.

As the issue of the cost of insurance is complex and in order to get to the heart of these issues as soon as possible, I have established four sub-groups to review them in detail. Chairs have been appointed to these sub-groups and work has commenced. The sub-groups are meeting weekly and their outputs are feeding into the meetings of the working group.

The working group has held five plenary meetings to date and will continue to meet every two to three weeks to the end of 2016. I am also in constant contact with the chairs and vice-chairs of the sub-groups to monitor progress and we are keeping to the tight deadlines.

The Department of Finance has provided additional human resources to the section dealing with insurance policy and servicing the Government task force and associated sub-groups.

A consultation process has commenced. I have had informal meetings with representatives from a number of key stakeholders including Insurance Ireland, AA Ireland, the Irish Brokers Association, the Injuries Board, the Irish Business and Employers Confederation, IBEC, FBD Insurance and the Central Bank of Ireland.

The working group and the four sub-groups are also meeting with the relevant stakeholders. At its third meeting, the working group met with representatives from the Law Society, AA Ireland, the Irish Brokers Association and the Consumers Association of Ireland. This morning the working group met with representatives of Irish hauliers and the car rental sector. Further consultations will be arranged. In addition, submissions received from all interested parties are being considered as part of the process.

By the end of October, the working group will provide the Minister for Finance with an updated report which will set out the priority actions required. We are already working on emerging recommendations. From November to December, the working group will develop an action plan to enable the relevant Government Departments and offices to commence the implementation of these priority actions. In this regard, I will be consulting regularly with Government colleagues and the Oireachtas.

I thank the Minister of State for his reply. The starting point in this debate is to acknowledge that the situation is out of hand. The latest example is that Aviva insurance is adding a 20% loading to any volunteer in the community first responder scheme around the country. That is costing the scheme, a life saving service, valuable members. The issue must be addressed because this is not acceptable. I welcome that the level of activity by the working group has been accelerated. There are also the four sub-groups. Can I take it that the objective is that the Minister will have an interim report by the end of the month setting out a series of recommendations that can be implemented? Ultimately, that is what all of us wish to achieve. I accept that there is no silver bullet and that a range of measures will be required. I expect the working group will draw from the testimony heard by the finance committee as well. I look forward to the Minister's response but I seek a commitment that we will have recommendations by the end of the month which we can then seek to implement in an effort to deal with the underlying causes of spiralling premiums.

At present, we are trying to build consensus on the causes of the increases in premiums. There are many different voices and a great deal of noise so we are trying to distil the information as to what is causing the increases. If we can get a breakdown of the premium and look at the different component parts that are driving up the cost, we can implement measures for each one. For example, if €50 of a premium is due to fraud or €35 is due to uninsured vehicles, we will identify specific measures to tackle each of those areas in the hope that by having a suite of measures we will be able to bring down the overall cost of premiums. The aim is to have emerging recommendations by the end of October. In November, we will take the time to ensure we can put a solid timeline and series of actions in place, be they legislative or otherwise, to have them implemented. The hope is that by the end of October we will have a definite idea of what the emerging recommendations are to hit each of the elements of the premiums.

I appeared before the finance committee to discuss this a number of weeks ago. The committee is also doing an important piece of work and we are hoping to get feedback from it on where it thinks possible solutions lie. We hope it will be able to report to our working group in advance of me reporting to the Minister for Finance.

I welcome the initiative that has been taken with the working group. The Minister realises the seriousness of the situation. It affects not just individual motorists but is also a major issue for the economy. Transport is a key input cost for the business community and insurance is a central element of that. There are much wider issues in the insurance industry that must be addressed but the focus here, quite correctly, is on motor insurance premiums. The increases of 70% over a three year period are putting people off the road. There is no denying that. It simply must be addressed. The Minister will have the support of Fianna Fáil when it comes to implementing measures that will make a tangible difference in tackling this issue. It must be a serious political priority. I realise that the Minister is giving the matter much of his personal time. I ask him to continue to do that. He can be assured of our support for any measure required in the House that is designed to tackle the premium hikes.

I thank the Deputy. This is my political priority. It is incredibly important for people throughout the country. Despite the gains being made in the economy at present through tax reductions and people getting back to work, people are not feeling it in their pockets because they are experiencing this rise in insurance premiums. It is hitting every aspect of the economy, including tourism, hauliers, health care and small and medium enterprises. There is a wider economic issue here and it speaks to competitiveness as well. Of course, we must manage expectations. It is a complex issue that will involve a complex policy response. We will not be able to solve it overnight but we are working day and night to try to get to the bottom of it. I am anxious that we take a consensus approach. There is no point in me coming to the Dáil with a group of measures we think will work if the other parties do not agree. We will pursue it by consensus and that is why the help from the finance committee is so welcome.

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