At the outset, it is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation and therefore my Department does not have access to the type of information being sought by the Deputy.
My officials contacted the Central Bank on this matter and were advised that pursuant to Section 33AK of the Central Bank Act 1942, it is prevented from disclosing any confidential information obtained through the performance of its functions or the exercise of its powers. Therefore, they say that they cannot comment on individual firms or release supervisory information relating to regulated entities.
It also should be noted that the decision taken by the company in question to exit the Irish market was not communicated to me, Minister of State D’Arcy, nor my officials. Neither has there been any communication by the company to my Department subsequent to this decision.
From media reports which the Deputy will also be familiar with, I understand that the relevant company has decided to no longer write new business. However, it is reported that all existing policies will be honoured and claims will be paid. I also understand from the reports that the relevant company has blamed losses “caused by stiff competition and the high volume of claims in the Irish market” for its decision.
While insurers may enter and exit markets regularly, it would appear that there is a trend currently for insurers to exit the Irish market. The media reports in relation to this particular company corroborate what Minister of State D’Arcy has heard from other insurers, in particular when he met with a number of UK underwriters in London who had recently pulled out of the Irish leisure insurance market. It also reinforces why the single most essential challenge, which must be overcome if there is to be a sustainable increase in the availability and affordability of insurance, is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. In this regard, the work of the soon-to-be-established Personal Injures Guidelines Committee as part of the Judicial Council will be essential in achieving that objective.
I therefore welcome last week’s announcement by Chief Justice Clarke that he has designated the seven judges that will sit on the Guidelines Committee. I understand that the designate committee will commence its activities on an informal basis shortly. This is an important development as it demonstrates that the Judiciary are giving this matter the priority I believe it deserves. While I appreciate that the development of a new set of personal injury award guidelines is the prerogative of the Judiciary, I believe that much work has already been done, in particular the PIC benchmarking exercise, which should assist the Judiciary in completing this work as soon as possible. The Government is willing to provide the Judiciary with any background assistance, such as input from the Cost of Insurance Working Group, should they think that necessary. I also understand that PIAB has written to the Judiciary to offer its expertise and assistance for the purpose of this recalibration exercise.
Finally, as I have stated before, I believe that if the issue of the level of awards in this country is addressed, that the problems facing particular businesses and community groups should recede. Indeed, I would recall that those UK underwriters whom the Minister of State met expressed a willingness to return to the Irish market if this was achieved.