Both I and the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy T.D., are very conscious of the difficulties that the cost and availability of insurance are having on many small businesses in this country, including those in the hospitality sector.
As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. I am not in a position to comment on individual cases, and neither I nor the Central Bank of Ireland can interfere in the pricing or provision of insurance products, as these are matters of a commercial nature, and determined by insurance companies based on an assessment of the risks they are willing to accept. These are considered by insurance companies on a case-by-case basis. 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.
Notwithstanding the above, it was recognised with the establishment of the Cost of Insurance Working Group in July 2016 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. This Working Group, now chaired by the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy T.D., has undertaken an examination of the factors contributing to the increasing cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses.
Following the publication of its Report on the Cost of Motor Insurance in 2017, the Working Group undertook an examination of the employer liability and public liability insurance sectors. This second phase culminated in the publication in January 2018 of the Report on the Cost of Employer and Public Liability Insurance. The Report makes 15 recommendations with 29 associated actions, detailed in an Action Plan with agreed timelines for implementation.
The most recent Progress Update was published last week and shows that 24 out of the total of 26 action points which were due for completion during 2018 overall have been accomplished. Minister of State D’Arcy is confident that the two outstanding actions will be completed in the coming months, along with the three remaining action points with deadlines set for various quarters throughout 2019.
The actions implemented to date cut across a number of different areas and include:
- The publication of by An Garda Síochána of the Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána
- The Law Reform Commission confirming that the subject of caps on damages for personal injuries litigation is included in its Fifth Programme of Law Reform and is being given immediate attention=
- Sections 8 & 14 of the Civil Liability and Courts Act 2004 have been amended to ensure defendants are appropriately notified of a claim having been submitted against their policy and to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected, respectively
- An Garda Síochána commencing the collection of statistics under the new “insurance fraud” category which has been added to the PULSE system
- The Courts Service confirming that it will publish a more detailed breakdown of awards in personal injury cases in its Annual Reports
Finally, I would like to assure the Deputy that the Cost of Insurance Working Group 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 Report on the Cost of Motor Insurance. 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, such as those in the hospitality sector, and a more competitive insurance market.