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 types of insurance.
Nevertheless, it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the availability and cost of insurance. What was recognised with the establishment of the Cost of Insurance Working Group (CIWG) 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. Building upon the work undertaken in the completion of the Report on the Cost of Motor Insurance, the second phase of the CIWG culminated in the publication of the Report on the Cost of Employer and Public Liability Insurance in January 2018.
This Report makes 15 recommendations with 29 associated actions to be carried out, set out in an Action Plan with agreed timelines for implementation.
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.
There is a commitment within the Report that the Working Group will prepare updates on its progress. The most recent such update was published in November 2018 and shows that of the 19 actions from the Report on the Cost of Employer and Public Liability Insurance with deadlines up to and including Q3 2018, 18 have been completed. It is envisaged that the next Progress Update will be completed by the end of February. Both of the primary Reports and all of the quarterly updates are available on the Department’s website, within “The Cost of Insurance Working Group” sub-section of the main “Insurance” section.
Finally, I would like to assure the Deputy that the CIWG will continue to focus on implementing the recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Motor Report. I am hopeful that the cumulative effects of the completion of the two Reports’ recommendations will include increased stability in the pricing of insurance for businesses and a more competitive insurance market.