Wednesday, 16 May 2018

Ceisteanna (3)

Michael McGrath


3. Deputy Michael McGrath asked the Minister for Finance when the national claims information database and the integrated insurance fraud database will be established; and if he will make a statement on the matter. [21455/18]

Amharc ar fhreagra

Oral answers (6 contributions) (Ceist ar Finance)

This question relates to the ongoing work of the cost of insurance working group and the implementation of its recommendations. It seems that there has been a lack of progress recently. Momentum has stalled and I have selected two items, in particular, on which I want the Minister to respond. The first is the national claims information database, while the second is the integrated insurance fraud database, both of which are central elements of the reforms promised with a view to bringing about a more competitive insurance market. I am looking for progress on both.

I thank the Deputy for his question. The development of the national claims information database is a complex project as insurers very often record data in different ways and do not necessarily use the same definitions. At the end of 2017 work was completed by a data sub-group of the cost of insurance working group on the development of the legislation which would enable the Central Bank to perform this additional function. On 19 December 2017 the Government approved the general scheme of the Central Bank (National Claims Information Database) Bill. The Bill is included in the Government's legislative programme on the list of priority legislation for publication this session. The Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach indicated to the Minister for Finance that it would not be conducting pre-legislative scrutiny of the Bill, which is helpful.

On 26 January 2018 the Office of the Parliamentary Counsel assigned a drafter to the Bill with whom officials in the Department of Finance are working to finalise a draft as soon as possible. I understand good progress has been made and I am hopeful a Bill will be published before the end of this legislative session. Consultation will also have to take place with the European Central Bank on the Bill once it is published. As the Deputy is aware, it will take a certain amount of time following publication of the Bill for it to pass through the Houses. I am hopeful the co-operation of all parties will ensure it will be passed by the Houses as quickly as possible. To ensure the database can be operationalised quickly following the enactment of the legislation, the Central Bank has continued to work in parallel on the technical specification for the database.

The development of the fraud database is a matter for the Minister for Justice and Equality whose Department is working on the project. I have been informed that a working group chaired by the Minister which also comprises representatives from An Garda Síochána’s National Economic Crime Bureau, Insurance Ireland and the Motor Insurers’ Bureau of Ireland is carefully considering the policy and legislative issues related to the new database and has consulted appropriate stakeholders, notably the Office of the Attorney General and the Office of the Data Protection Commissioner, ODPC. I understand the group has completed a comprehensive report which was submitted to the ODPC for its consideration. In its response the ODPC identified a number of challenges from a data protection perspective which must be addressed. The working group is continuing to liaise with stakeholders to overcome these challenges and progress the recommendation. Consequently, it is not possible at this time to provide a timeline for its establishment.

Progress on insurance reforms has undoubtedly stalled. The latest update report appeared online on Friday evening. There was no press release and no alert. When one examines it, it is hard to avoid the conclusion that the real meat of the recommendations, the key reforms, is being nobbled. They have certainly been stalled, at a minimum. The national claims information database which aims to provide accurate and reliable data for claims affecting the insurance industry and policy holders was to be in place by next month, yet the full legislation has not been published. It is well behind schedule. It is a similar story with the fraud database; there is no sign of it. The Minister of State says it is a matter for the Department of Justice and Equality, but it is a key component of the recommendations of the cost of insurance working group. It is hard to disagree with the Alliance for Insurance Reform when it states progress has stalled. The protocol that requires insurance companies to notify policy holders of progress on claims has stalled. Legislation to compel insurance companies to communicate the reasons for large increases in premiums has been abandoned and there has been no progress on the Garda insurance fraud unit. These key elements of the reforms recommended are not progressing. The intent is good, but there is simply no follow-through or delivery.

I have to disagree with the Deputy. The cost of insurance working group has put a lot of effort and energy into dealing with this issue. We are now on the meat-and-two-veg legislative side of things that involves communication between the Department of Finance, the Department of Justice and Equality and the Department of Transport, Tourism and Sport. We must also speak to other stakeholders, including An Garda Síochána. We have to discuss the matter with the Office of the Attorney General and the Office of the Data Protection Commissioner. It is not a question of imposing my will on the people in question. I have to bring them along with me and get agreement on the reforms to be implemented. It is the really difficult stuff that we are trying to do, but we have already done a lot. In fairness to the Minister for Justice and Equality, there are a number of measures that will be implemented in quarter three. They include data protection measures such as people having the opportunity to retain imagery and video related to a claim. A person against whom a claim is being made must be informed within the permitted period to enable the data to be retained in order that he or she can mount a proper defence. An improved pathway where a civil court judge says there is a potential element of a fraudulent or exaggerated claim has to be put in place. The legislation in that respect is fine; the pathway needs to be put in place. It is very easy to point to five areas where we have fallen behind, but it has been forgotten that we have progressed 45 other actions on time, some ahead of schedule.

I do not doubt the Minister of State's personal commitment or that of his officials. Much work has been done, but it is undeniable that there have been significant delays and that many of the key central reforms to bring about a more competitive insurance industry, greater transparency for policy holders and greater accountability have stalled. I have to call it out when I see it because it is the case in this instance. This is about reforming the claims process in order that policy holders will be given much more information at an earlier stage on claims made against them. The results of the work of the Personal Injuries Commission are available. It is benchmarking and looking at award levels in Ireland compared to those in other jurisdictions. It is absolutely vital that that work be completed. The Minister of State will have the full support of the House in driving through these reforms. Where people are not meeting their responsibilities or embracing change and driving change, including Insurance Ireland and any of the large insurance companies, the Minister of State has an obligation to call it out for what it is. Where measures are being stalled because people are not really committed, raising issues and concerns and throwing canards in the way, the Minister of State must call it out for what it is.

I thank the Deputy for his support. I know that the reforms are legitimately supported on every side of the House. Let us make no mistake that the biggest issue we face in the insurance sector is the extraordinary level of awards. The report conducted by officials in the Department of Finance on rewards and benchmarking them with those made in the United Kingdom, our nearest neighbour, produced startling figures. The indications are that the equivalent award in Ireland is between three and five and a half times more. That is the first piece of data we have and it is really helpful. The book of quantum has been reviewed, but the only way it can be reduced is if the Judiciary reduces the awards made. The book of quantum reflects the actual awards made, not the amounts we would like to think should be awarded. When I speak about the cost of insurance, I always make the point that the reason it is so expensive in Ireland is the level of awards. If the awards are high, we cannot hope to have low premiums.