Thursday, 12 December 2019

Ceisteanna (53, 54, 55)

Pearse Doherty

Ceist:

53. Deputy Pearse Doherty asked the Minister for Finance the number and date of meetings held in 2019 with childcare providers or the childcare sector regarding increasing insurance costs in the sector. [52374/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

54. Deputy Pearse Doherty asked the Minister for Finance the number and date of meetings held in 2019 with the Minister for Children and Youth Affairs regarding increasing insurance costs in the childcare sector. [52375/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

55. Deputy Pearse Doherty asked the Minister for Finance the actions he will take to respond to increasing insurance costs in the childcare sector and the inability of certain childcare providers to access insurance cover for 2020. [52376/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 53 to 55, inclusive, together.

Let me say at the outset that I am very aware of the issues facing many businesses and organisations in various sectors in relation to the cost and availability of insurance. However, neither Minister of State D’Arcy nor I have had any dedicated meetings with the Minister for Children and Youth Affairs, or childcare providers or their representative bodies, on the specific issue raised in the Deputy’s question. I would also add that since the start of 2018 my Department has not received any representations from relevant childcare organisations or childcare providers. This would seem to indicate that there were not any significant problems in relation to the general availability or cost of insurance within the childcare sector during this period. In this regard, it should be noted in other sectors where there have been problems with insurance costs and availability of cover, there has been significant engagement with Minister of State D’Arcy and my Department on such matters.

Notwithstanding this, I have recently become aware, through media coverage, that some childcare providers may face difficulties in obtaining insurance, as a result of the apparent withdrawal of a particular insurer operating in that sector. This may, in particular impact those providers that have open insurance claims against them, for example, and are unable to secure an alternative provider. This is a worrying development and is not too dissimilar to the withdrawal of other operators in the leisure sector earlier this year. From Minister of State D’Arcy’s dealings with some of these insurers, including his meetings in London in September, it is likely that the overall unstable claims environment in Ireland as well as uncertainty created by Brexit have been factors in the decision of the company in question.

As the Deputy is aware however, there are significant constraints on what the Government can do to immediately resolve issues around the cost and availability of insurance. In this regard, neither I, nor the Central Bank of Ireland, have any influence over the pricing of insurance products, and neither can we compel any insurer operating in the Irish market to provide cover to any sector of the market, as this is a commercial matter for insurers. A further constraint is the fact that for constitutional reasons, the Government cannot direct the courts as to the award levels that should be applied.

Notwithstanding these constraints, reducing the high cost of insurance generally and making Ireland more attractive to new entrants has been a priority for the Government. The Cost of Insurance Working Group (CIWG) was established in July 2016 and undertook 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, businesses and the voluntary and arts sectors. The CIWG has produced two reports the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance.

Many reforms have been made already including amendments to the Civil Liability and Courts Act 2004, the Personal Injuries Assessment Board Act, and the establishment of National Claims Information Database in the Central Bank of Ireland. However it is clear that the single biggest challenge that still needs to be addressed and which is having the most impact in the general public liability area is the level of awards that exist in Ireland, for relatively minor injuries, as compared to other jurisdictions. In this regard, the key recommendation arising from both of the CIWG’s reports was the establishment of the Personal Injuries Commission (PIC) and the publication of its two reports. The PIC conducted a benchmarking of award levels between Ireland and other jurisdictions for the first time and this 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. On foot of this recommendation, 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.

Work to establish the Judicial Council is well underway. With regard to the Personal Injuries Guidelines Committee and the subsequent publication of its new guidelines to recalibrate award levels and replace the Book of Quantum, it is a matter for the Judiciary to put in motion the necessary process to expedite these. The first important step in this process was the recent announcement by the Chief Justice of the names of the seven “members designate” of the Personal Injuries Guidelines Committee (PIGC), which will be chaired by Ms Justice Mary Irvine of the Supreme Court. This is a significant step forward as I believe it is a recognition of the prioritisation that the Judiciary are giving to this issue.

I am hopeful that the creation of personal injury damage guidelines by the Judiciary can result in the lowering of award levels. Were this to happen, I would expect a lowering of the costs of insurance generally. I would also expect that insurers operating in Ireland would widen the areas of risk they will cover, as I believe that cherry picking only the most profitable areas of insurance, which appears to be happening at the moment, does not serve anyone’s overall economic interest over the medium to long term. I note the comments made by the Interim Insurance Ireland CEO Gerry Hassett recently that if award levels come down so will premiums. I believe that this is a very reassuring commitment and it is one the Government intends holding the insurance industry to. I would hope that they will also widen the areas of risk they are willing to cover.

Finally, as the Deputy will know, the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy TD, operates an open-door policy regarding meeting any stakeholders that approach him about difficulties they are encountering in securing insurance. Therefore, if there is a significant underlying problem in the childcare sector, I would encourage its representative associations or other key stakeholders to meet with Minister D’Arcy to outline the issues that their members are experiencing in respect of insurance.