I welcome the proactive role that the Alliance for Insurance Reform is taking in regard to the issue of the cost of insurance, particularly for businesses and voluntary organisations. Both the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy TD, and I are very conscious of the problems arising from false or exaggerated personal injury claims and the impact that the volatility in insurance prices generally in the last few years has had on Alliance members, as well as other businesses and organisations.
Minister D’Arcy has formally met with the Alliance on a number of occasions, mostly recently on Tuesday last (September 18), and issues related to the Alliance’s “10 asks” were discussed to some level of detail, including the four specifically related to the issue of insurance fraud highlighted in the Alliance’s press release last week.
All four relevant issues were comprehensively examined and considered by the Cost of Insurance Working Group in the course of producing its two reports, namely the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance. Indeed, at least two of the four measures proposed by the Alliance are in the process of being implemented.
The Department of Justice and Equality has prepared Draft Heads in relation to amending section 8 of the Civil Liability and Courts Act 2004 to ensure defendants are notified within one month of a claim having been lodged against their policy and it is expected that the amendments will be progressed by the end of the year.
Pursuant to Recommendation 13 from the Liability Insurance Report, a procedure to ensure exaggerated and misleading claims are referred to the Gardaí for investigation and prosecution, if appropriate, has been established. In particular, a new set of guidelines in respect of the reporting of suspected fraudulent insurance claims has been agreed between An Garda Síochána and insurance entities. These guidelines are due to become operational shortly. A separate stream of work relates to an examination of the court process in circumstances where the court believes there to be an element of fraud or exaggeration in the claim which should be investigated by the Gardaí. Measures which could be taken to ensure that the appropriate action is taken in such circumstances are being examined.
In addition, another “spin-off” occurrence from the implementation of this recommendation has been a commitment for the Garda National Economic Crime Bureau and Insurance Ireland’s Anti-Fraud Forum to meet on a regular basis in order to discuss and act upon current and ongoing general issues which arise in the area of insurance fraud. This positive development is an opportunity for greater communication and improved processes and it is hoped that it will lead to a better understanding on both sides of the issues arising in the investigation and reporting of fraud.
In relation to the establishment of a dedicated Garda insurance fraud unit, Insurance Ireland communicated the outcome of its cost/benefit analysis at the start of July 2018, recommending industry funding of such a unit. I understand that the new Garda Commissioner has yet to form a view on the proposal, and there are a number of serious issues which will require further consideration before any decision whether or not to proceed in this manner is taken. It is important to note that while the idea of a dedicated Garda Fraud Unit has been the focus of a lot of attention, it was in fact one proposal within the overarching Recommendation 26 in the Motor Report which called for “further cooperation between the insurance sector and An Garda Síochána in relation to insurance fraud investigation", and, as outlined above, significant progress has been achieved in this regard.
Finally, in relation to the proposal to regulate claims management companies, my officials have been looking at this issue to understand the precise scale and nature of the perceived problem. Engagement has taken place with the relevant regulatory authority in the UK, as well as relevant parties here, including the Law Society of Ireland and the insurance industry. It should be noted that the Law Society has taken a very proactive role against “claims harvesting” websites operating in Ireland, and its investigations have led to a number of websites having been taken down over the past couple of years. I understand that the number of such websites operating in Ireland has decreased significantly over the past couple of years overall, but my officials will continue to examine this issue and take appropriate action accordingly.
