I am aware of the concerns raised by the Deputy in relation to the financial strain which the cost of insurance may place on community, voluntary and charitable organisations, such as men’s sheds. As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in respect of particular categories of policyholders.
However, what was recognised with the establishment of the Cost of Insurance Working Group was that the environment within which insurers conduct their business can be better shaped, in order to make the Irish insurance market a more competitive one and also make it more attractive for new entrants. In this regard, the initial focus of the Working Group was the issue of rising motor insurance premiums and the Report on the Cost of Motor Insurance was published in January 2017. The second phase of the Cost of Insurance Working Group under the Chairmanship of the Minister of State for Financial Services and Insurance, Michael D’Arcy TD, published its report in relation to employer liability and public liability insurance in January 2018. This Report acknowledges that many of the difficulties being faced by business are also impacting community groups, including men’s sheds.
The Working Group’s second Report makes 15 recommendations with 29 associated actions to be carried out. The recommendations and actions are detailed in an action plan contained in the report with agreed timelines for implementation. All 29 actions are scheduled to be implemented before the end of 2019, with 26 due for completion this year. The recommendations, covering three main themes, include actions to:
- Increase Transparency: enhance levels of transparency and improve data sharing and collection processes
- Review the level of damages in personal injury cases: request that the Law Reform Commission undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries and
- Improve the personal injuries litigation framework: through a number of measures, namely:
a. ensuring potential defendants are notified in sufficient time that an incident has occurred in relation to which a claim is going to be made against their policy;
b. tackling fraudulent or exaggerated claims; and
c. ensuring suitable training and information supports are available to the judiciary to assist in the fair and consistent assessment and awarding of damages in personal injury cases.
The fifth Quarterly Progress Update on implementation was published on 11 May and is available on the website of the Department of Finance. In respect of the actions from the Report due for completion in Q1 2018, all eight deadlines have been met.
While the focus of the Reports was to examine the cost of insurance for motorists and for businesses in particular, it is envisaged that the cumulative effect of the implementation of the recommendations, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers and businesses, and also beneficially impact community, voluntary and charitable organisations in Donegal and across the country.