I am aware of the issues facing some businesses in the leisure sector when it comes to the affordability and availability of insurance. The pricing of insurance products is a commercial matter for insurers and neither I, nor the Central Bank of Ireland, have any function in this matter. 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, the Government cannot direct insurance companies to cover certain types of risk, such as those in the leisure sector.
Notwithstanding the above, I wish to emphasise however that the cost of insurance remains a priority issue for the Government. The Cost of Insurance Working Group (CIWG), which was established in July 2016, and has produced two reports, is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report . The latter report in particular makes it clear the impact that the cost of insurance is having on the leisure and other sectors and this position has been reinforced by Minister of State D’Arcy’s continuing engagement with the sector. Therefore, there is a clear understanding of the impact of this problem on the leisure sector and there is a recognition that the single most essential challenge which must be addressed if we are to overcome it is a sustainable reduction in insurance costs.
In this regard, the establishment of the Personal Injuries Commission and the publication of its two reports, which included a benchmarking of award levels between Ireland and other jurisdictions for the first time has been very helpful in identifying the scale of the problem that is faced. This research showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales. The PIC recommended that a Judicial Council be established and that it should compile guidelines for appropriate general damages for various types of personal injury. In carrying out this exercise, the PIC believes that the Judiciary will take account of the jurisprudence of the Court of Appeal, the results of its benchmarking exercise, etc.
As the Deputy is aware, the Government with the support of all parties in the Oireachtas prioritised the passing of the Judicial Council Act 2019 . This Act provides for the establishment of a Personal Injuries Guidelines Committee upon the formal establishment of the Judicial Council. This Committee is tasked with introducing new guidelines to replace the Book of Quantum. While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly.
Other steps take to date to address the cost of insurance include the following:
- The establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance. The CBI is due to make its first report by the end of 2019, and will make recommendations to me regarding potentially expanding its scope to include employer and public liability insurance;
- Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;
- Commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
- The reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance;
- Various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality, and;
- The commencement and prioritisation by the Law Reform Commission (LRC) of its work to 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, as part of its Fifth Programme of Law Reform;
I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from August 2019 show that the price of motor insurance is now 24% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, particularly those relevant to businesses.
In conclusion, I would like to assure the Deputy that important reforms are taking place and that I am confident that if the level of awards are reduced as a result of the Personal Injuries Guidelines Committee, then the insurance premium and coverage issues that are being experienced by the leisure sector and many businesses more generally should recede.