I acknowledge the general problems faced by businesses in the wider leisure sector, particularly because of the withdrawal of a key insurer that was operating in that market. As the Deputy is aware, 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.
Unfortunately, there is no single policy or legislative “silver bullet” to immediately remedy this issue. In addition, there are many constraints faced by the Government in trying to address it, in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and as set out above it cannot direct insurance companies as to the pricing level which they should apply.
I wish to emphasise however that insurance issues remains a priority for the Government. The Cost of Insurance Working Group (CIWG), chaired by Minister of State Michael D'Arcy, TD is continuing to work to implement the recommendations of both of its reports. Its most recent Progress Update was published in July and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed. To that end, some key achievements to date from the two reports, include the following:
- The enactment of the Judicial Council Act 2019, in July which provides for the establishment of a Personal Injuries Guidelines Committee to provide guidelines to replace the Book of Quantum;
- 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;
- Amendments to the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
- The establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance; the Central Bank is currently reviewing the possibility of expanding is scope to cover business insurance; and
- 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.
I believe that these reforms are having an impact with regard to private motor insurance (CSO figures from August show that the price of motor insurance is now 27.1% 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, including those relevant to businesses. However, undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs particularly for businesses and other operators in the leisure sector is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions, and the establishment of the Judicial Council is crucial in this regard.
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, then the insurance cost and coverage issues that are being experienced by the leisure sector should recede.