Dáil Éireann Debate, Tuesday - 20 October 2020
194. Deputy Louise O'Reilly asked the Minister for Finance if his attention has been drawn to the fact that several major insurers have left the live events industry; and his plans to work with the arts, entertainment and events industry to come up with a solution to the problems that this poses, including examining the possibility of the State acting as an insurer. [31076/20]
Amharc ar fhreagraAt the outset let me say I have an appreciation of the problems faced by many businesses in relation to public liability insurance, including those in the arts, entertainment and events industry. As this is a commercial matter, neither I, nor the Central Bank of Ireland, can direct the pricing of insurance products, nor can we specifically compel any insurer operating in the Irish market to provide cover. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
In relation to the provision of insurance by the State, I would be cautious about the introduction of such schemes for a number of reasons. Firstly, any State insurance scheme would be required to comply with the same prudential rules as private companies, thereby meaning that the cost would need to reflect the risk involved. Secondly, there is no reason to believe that the State would be any better at managing risks than private firms, and therefore be in a position to provide insurance more affordably. Thirdly, such an approach could actually decrease competition, with insurers potentially discontinuing certain lines if there is a view the State will insure these risks instead, particularly for market segments considered as unprofitable. This would reduce competition, potentially increasing the cost of premiums. Accordingly, I am not convinced that a State-backed insurance scheme would be a solution to the cost or availability of insurance, either for the arts, entertainment and events industry or other consumers more generally.
In this regard the Deputy will appreciate, there is no single policy or legislative fix to remedy the cost and availability of insurance issue. Insurance reform is a key policy priority for this Government as reflected in the Programme for Government (PfG). There are a number of areas that require reform and this thus requiring a ‘whole-of-Government’ approach as recognised in the PfG. As such this lays out specific commitments that are aimed at addressing consumer and business concerns on the cost of insurance.
Implementation of this agenda will be a key issue for myself and Minister of State Fleming as well other members of Cabinet, especially those that will be working on this through the recently established Cabinet Committee on Economic Recovery and Investment’s Sub-Group on Insurance Reform. This is chaired by the Tánaiste, and also includes myself, Ministers McGrath, McEntee, and O’Gorman, together with Ministers of State Troy and Fleming as standing members. I strongly believe that this Sub-Group provides the best opportunity to address the cost and availability of insurance through a cross-Governmental response. We will build and expand upon the previous commendable work done by the Cost of Insurance Working Group, particularly with regard to motor insurance where premiums are now a third lower than their mid 2016 peak level.
Finally, the Deputy will be aware that, as part of Budget 2021, the Government announced supports for live entertainment to the amount of €50m. This includes for the first time measures for the commercial entertainment sector and will support live entertainment in venues across the country, building on the demand for support under the July stimulus Music Scheme. A scheme of capital grants for equipment will also operate in 2021. Combined with other measures announced by me, this will provide additional supports to this sector, which I recognise has been severely impacted by COVID-19.
In conclusion, the Deputy can rest assured that in addition to the Budget 2021 measures to support the arts, entertainment and events industry, the issue of insurance reform that impacts the entire economy is a key priority issue for this Government. In that context our focus is to continue to seek to ensure that progress is made in this important policy area.
