Ms Sylvia Cronin:

We have to be conscious that at any point in time insurance companies are looking forward. They always have to think what the cost will be for the accidents that happen today. If there are ten accidents today, what is the expectation of the settlement cost of those ten claims? From a supervisory perspective, we have looked at the assumptions the insurers are making. We have to be satisfied the assumptions the insurers are making include all the changes happening in the claims environment.

When we look at what has happened, we know for a fact that in 2014, there were increases in the limits for District Court and Circuit Court charges. Second, there was the recovery of social welfare benefits which took effect in August 2014. Third, the establishment of the Court of Appeal resulted in the appointment of new judges in October 2014. Nobody knows what impact that will have. It could result in an increase or decrease in claims costs. Fourth, the discount rate reduced from 3% to 1% as a result of the Gill Russell case in December 2014. They were four specific changes that happened in 2014. Those changes need to be reflected in the assumptions within insurance companies when they are looking at their claims. As a supervisor, we will be looking to see if they are included in the forecast of settlements in order that we have reassurance that companies have the reserves needed to pay out the claims.