Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 3:

In page 4, line 7, after “insurance business” to insert the following:“including but not limited to:

(a) management expenses, including all general and administrative expenditure;

(b) commissions, including amounts payable to brokers, payable to reinsurance brokers, as well as any other sundry commissions paid (including fronting fees); and

(c) fees related to the MIBI, including levies paid annually to MIBI in respect of claims paid arising from the use of uninsured or untraced vehicles”.

As the Chairman has said amendments Nos. 3 and 7 are grouped, although I do not see that they are closely related at all. That said, I will deal with them together.

The blue book contains specific headings defining business expenses. This is a critical issue because it sets the parameters insurers must follow. Otherwise we would effectively be allowing them to self-declare. For example, returns in respect of non-life insurance business must not be distorted by agreements between the companies concerned or by arrangements which could affect the apportionment of expenses. Management expenses should not be charged to underwriting accounts, including directors' fees and foreign exchange gains or losses related to investments other than those attributable to the underwriting account.

The amendment seeks to tighten up on what can be declared as expenses and to distinguish between what are genuine business expense costs and what are distortionary bookkeeping exercises. I will give an example of how they can be inflated. We need to do this in primary legislation. It is important that parameters are set down here at this time. Responsibility should not be delegated to the Central Bank; we need to decide on certain parameters.

When dealing with people trying to get insurance, we must do everything to ensure that the database helps them get insurance at a reasonable price. This is about tightening up and ensuring that there cannot be an inflation of or a bookkeeping exercise in terms of expenses that can be declared.

As stated, I do not believe amendments Nos. 6 and 7 are related. Amendment No. 7 outlines a number of steps which can be counted in the context of the section. It deals with the issue of transparency which is at the core. It also deals with out-of-court discussions through unofficial channels that are not recorded in any way. By adding these two additional non-formal steps I am trying to ensure the data collected include these informal discussions which are not captured in the Bill at the moment. The additional informal discussions to be captured if the amendment is accepted would be:

(c) direct negotiation after registration of the claim by the claimant under the Personal Injuries Assessment Board Act 2003 but before the respondent consents or declines a formal assessment progressing,

(d) direct negotiation after consent by the respondent to a formal assessment but before a final award is made under the Personal Injuries Assessment Board Act 2003 or final determination of the claim by the acceptance of both parties, or by default of rejection by the respondent, of the formal award under the Personal Injuries Assessment Board Act 2003.

These areas are not currently captured by the Bill. It is important to have the full data available in order that we know what is happening through informal channels and other parts of resolutions to ensure all of the data are captured in the database.