Dáil Éireann Debate, Wednesday - 13 November 2019
29. Deputy Pearse Doherty asked the Minister for Finance his plans to implement further reforms in view of the rising costs of insurance and the escalating crisis in the market and if he will make a statement on the matter. [46847/19]
Amharc ar fhreagra30. Deputy Michael McGrath asked the Minister for Finance the status of the work of the cost of insurance working group with particular regard to compensation award levels and if he will make a statement on the matter. [46833/19]
Amharc ar fhreagraThe insurance crisis gripping this State is one that affects all sectors and regions. We know it is squeezing incomes, crippling businesses, damaging communities, hitting jobs and putting serious pressure on motorists. A recent survey by Public Participation Networks found that 83% of groups in the voluntary and community sector were hit with insurance hikes in the past three years. Despite repeated claims by the Minister that the cost of motor insurance is coming down since the peak of 2016, it is not the case and he should stop repeating that. We know that it increased from 2016 from 2017 and is likely to raise again. These figures are from the insurance industry. When will we see serious change in respect of this? When will we see the sectors that are no longer able to get cover from insurance companies being able to continue to operate? When will motorists see premiums fall and fall significantly? When will we see the enactment of the section of the Judicial Council Act that allows for the review of awards?
I propose to take Questions Nos. 29 and 30 together.
I must correct an inaccuracy uttered by the Deputy. The cost of motor insurance is down 27% from the peak. It is important that we accept the facts. The facts are that the CSO says it is down 27% from the peak, which is progress. The impact has not been as great in areas involving direct interaction with the public such as the hospitality, play centre, leisure or tourism sectors along with certain voluntary groups and the performing arts. We are working on that. I have met representatives from these different sectors on a regular basis over the past 18 months so I am well aware of their frustration about the perceived pace of reform. Unfortunately, there is no single policy or legislative silver bullet to stem or reverse premium price rises immediately. This is because there are many constraints faced by the Government in trying to address this issue, in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons, it cannot direct insurance companies as to the pricing level they should apply in respect of businesses seeking insurance. The Deputy knows both of these facts are true.
The passing of the Judicial Council Act this year will be the game changer. 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. The commencement of the Judicial Council Act is a matter for the Minister for Justice and Equality. Work to establish the judicial council is well underway. I understand that the full Act can only be commenced when the Judiciary is in a position to establish formally the judicial council but that the Chief Justice has stated that he hopes to be able to do so before the end of this year, which I welcome. For my part, I am very eager to have this up and running.
The Government is doing all it can to facilitate this process. In this regard, I am pleased to note that the Minister for Justice and Equality commenced the necessary provisions of the Act a number of months ago to allow all the necessary background work to be completed in preparation for the formal establishment of the judicial council. In addition, the Minister for Finance allocated €1 million in budget 2020 to enable the process to be expedited by the Judiciary. These steps will ensure that the Judiciary has the necessary means so that when the council is established, its various functions can be operationalised.
With regard to the personal injuries guidelines committee and the subsequent publication of its new guidelines to re-calibrate award levels and replace the book of quantum, it is a matter for the Judiciary to put in motion the necessary process to expedite this. The first important step required by the legislation is for the Chief Justice to make the necessary appointments to the personal injuries guidelines committee. I understand that there have been developments around the designation of judges to be appointed upon the formal establishment of the committee and I anticipate that the Chief Justice may have more to say on that matter next week. It is hoped that this in turn should allow the members-designate to commence their activities on an informal basis so as to progress as far as possible their work prior to formal establishment. The Deputy has heard me speak about the parallel process of this happening before the actual establishment. I welcome this development as it demonstrates that the Judiciary is giving this matter the priority I, the Minister for Finance, the Government and every Member of this House believe it deserves. I also understand that the Personal Injuries Assessment Board has written to the Judiciary to offer its expertise and assistance for the purpose of this re-calibration exercise. I also commit the cost of insurance working group to the re-calibration exercise. Finally, I believe that once award levels are re-calibrated to a more sustainable level and applied consistently, the current problems being experienced by impacted businesses should recede.
The CSO carries out an examination on the basis of one premium. The insurance industry actually looks at how much it charges across every motor vehicle and gives the average price. Its statistics show that the cost of motor insurance did not decrease from 2016 to 2017 but instead increased so I ask the Minister of State to look at the data, accept the facts and stop giving out misleading information.
I have no certainty that this sector, which is completely without insurance, will have insurance based on what the Minister of State has said. There is no State intervention regarding that. I am not sure whether the Government has even discussed the withdrawal from the market of Axa XL, the underwriter that has withdrawn from this market, with that company.
We hear lots of claims. We hear claims that the cost of claims is pushing up premiums. The figures tell a different story. We know that according to published figures, the value of personal injury awards fell by 15% from 2014 to 2018. We know that in the same period, 55,000 fewer motor insurance claims were made and that during the same period, motor insurance premiums went up by 45%.
A number of things need to be done. One of them will happen this evening with my Consumer Insurance Contracts Bill. We need to establish a dedicated insurance fraud unit. This means a commitment from the Minister for Finance to An Garda Síochána that the Government will fund and resource this unit and that it will not come from existing resources. The Government needs to enact the section of the legislation that allows for the judicial council advisory committees to be set up. It could be as long as September 2021 before this work is complete. There are many other things that, unfortunately, time will not permit me to deal with at the moment.
I will start where the Deputy finished. He did not hear what I said in my reply. The Judiciary will establish things in an informal way.
The Judicial Council Act cannot be commenced until all of the committees are formed. That is the law as passed here last summer. With the full co-operation of the Chief Justice and the Judiciary, we hope to announce the judges designated very soon. The Chief Justice will be commenting in that regard next week. The Deputy did not listen to one thing I said. These are the judges who will reduce awards, recalibrate the guidelines and replace the book of quantum that is doing so much damage.
With regard to a dedicated fraud unit, the Deputy is wrong to talk about the establishment of such a unit within the Garda National Economic Crime Bureau, GNECB, in the Phoenix Park. Such a unit would only deal with blatant established cases of full fraud. It would not deal with a case of exaggeration down the country at all. Commissioner Harris's proposal is to have gardaí with relevant experience and knowledge deployed to each division. These gardaí will deal with such cases. The Deputy is talking about a big centralised unit in the Phoenix Park which would not go down the country at all.
Will the Minister of State clarify what he is saying in respect of the personal injuries committee? As of now, we do not have a judicial council. This council is required to set up the personal injuries committee. Is the Minister of State saying that this committee will begin its work informally as soon as next week? Will he please clarify that matter?
The Minister, Deputy Donohoe, needs to personally get more directly involved with regard to the insurance crisis. I received a reply to a parliamentary question recently which showed that, since the Deputy came into office as Minister for Finance, he has only had one meeting with either the insurance industry or any individual company. That meeting was in March 2018 and was held to discuss the issue of US tax reform. The Minister of State, Deputy D'Arcy, has had dozens of meetings with individual companies and with Insurance Ireland. I am not saying that is the only measure of the Minister's involvement on the issue of insurance but he needs to get his hands dirty and to get directly involved. Any attempt to resolve the insurance crisis will require the authority and power of the Minister for Finance. This needs to be a regular issue on the Cabinet agenda. These facts show, however, that the Minister has not directly engaged on the issue of insurance reform.
The Deputy has asked me a direct question about the personal injuries committee. The answer is that we expect the Chief Justice to have more to say about the judges designate next week. That is where we are. The Judiciary has agreed to operate informally. The law is clear. Outside of this informal operation, it cannot operate at all until all of the committees under the judicial council are in place. None of us wants that. I have agreed with the Judiciary and the Chief Justice that they will operate informally. We will have judges designate, who will later form the committee. The committee will, as I have said, be established pretty soon. The Chief Justice will have more to say on this matter next week. With regard to the involvement of the Minister, Deputy Donohoe, and the Government, it will then fall to those justices and will be out of the Government's hands. The Oireachtas and the Government will have done our work. It will then fall to those seven members of the Judiciary to recalibrate the guidelines.
The problem is that I have listened to the Minister of State for a long time and I know his intentions, which are good. I also agree with some of the comments made by others in the House suggesting that he is not getting support at Government level. I know he disputes this suggestion but that is my view. This does not, however, take away from the real issues. As the Minister of State has just stated, when the committees are set up is out of our hands now. It is only at this point that the Minister will be able to finally give the order to commence the legislation we passed earlier in the summer. The Government has not, however, secured any commitment from the insurance industry such as was secured more than ten years ago. At that time, the industry committed to reducing premiums if certain reforms were introduced. This involved a very clear table, a schedule produced at the time which stated that premiums would reduce by a certain amount for each given reform. The Minister of State is taking the industry's words at face value.
I was asked to ask the Minister of State a question this morning. A 19 year old who is trying to get driving on a provisional licence could not get insured so he went to a broker. The best price this broker could get this 19 year old living in rural Ireland was €12,319.78. The Minister of State says that I am wrong but I can give him the quote.
I ask the Deputy to do so please.
I will. I cannot believe the Minister of State is suggesting that I am putting incorrect information-----
I am not saying that. I am saying there is something wrong in what the Deputy is saying.
There is something wrong. The insurance industry is ripping off its customers. It is doing so through dual pricing, exaggerated costs, and the misleading information it puts into the public domain. We need to get a grip on this issue and to deal with it. It is up to the Government to take this industry to heel.
In recent days, Cork BMX Club has had to cancel an event because Cork City Council, which was to host the event, was not satisfied with the insurance cover offered by the parent body of the club. This is just a symptom of what is happening. The scale of this crisis is growing with each passing day. The Minister of State knows well that many businesses, when the time comes to renew their existing policies, will not only be unable to get affordable cover but will be unable to get any cover at all. This is particularly true of businesses in the leisure industry. This is a real issue.
When the Minister of State talks about judges-designate starting work, is he saying that they will start working on the judicial council or that they will start working on the personal injuries committee itself, which is what we need? With regard to fraud, my understanding is that the funding has not been provided to enable An Garda Síochána to do the work it is required to do to tackle fraud, even under the new divisional structure that has been outlined.
I will come in on this matter because a number of the questions were directed at me. Deputy Michael McGrath was good enough to confirm that the measure of my engagement on any particular issue cannot be measured solely on the number of meetings I have. I confirm to the House that I have been directly involved in the completion of each of the steps to which the Minister of State, Deputy D'Arcy, referred in his opening statement, as I should be. He went through the position with regard to the personal injuries guideline committee and the progress that is likely to be made in setting up the judicial council. I have been involved in all of that because of the scale of the issue. I am absolutely aware of the problems this issue is causing for businesses, those involved in leisure activities and those who depend on leisure activities. Deputy Michael McGrath also raised an issue regarding the work of the justices and asked when they will begin work in this area. Their work will begin with the personal injuries guidelines committee.
Straight away.
With regard to Deputy Pearse Doherty's point, key figures within the insurance industry have given a commitment as to how they will respond when this work is under way. The Government and I intend to hold them to account in that respect.
Will the Minister publish that commitment?
