Oireachtas Joint and Select Committees

Thursday, 13 June 2019

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Cost of Insurance Working Group: Minister of State at the Department of Finance

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I welcome the Minister of State and his officials. I also welcome his remarks on my Bill which was passed on Second Stage nearly two years ago. It was agreed at this committee that we would deal with amendments to it on Committee State in the second week of July. As I know that the Government has issued a money message for it, I look forward to passage of the Bill into law.

In his opening statement the Minister of State said he had put it to the industry that it needed to give strong public commitments very soon to reflect savings to be gained in the recalibration of award levels. Has he received a single commitment from it that this will happen? We know that in 2002 the Irish Insurance Federation - Insurance Ireland's predecessor - made a very clear commitment when it outlined a list of reforms it believed were required and argued that if they were implementted, there would be a reduction in premiums by a certain percentage. There was transparency. I do not know if the Minister of State trusts the insurance industry, but I do not. It is involved in price gouging and a lot of spin, bluster and distraction on the real reasons premiums are increasing. I am not saying its issues such as the making of exaggerated claims and fraud are not real and do not need to be dealt with. There is a need for zero tolerance in the attitude towards them, but when we see that insurance companies have increased their profits by 1,300% in one year and made a profit of nearly €250 million on the backs of hard-pressed motorists and businesses that are seeing their public liability insurance premiums increase, that tells me that it is simply price gouging on the part of the industry. Has the Minister of State received a commitment from it similar to the one received from the Irish Insurance Federation in 2002 when it stated clearly that if anti-fraud measures were to be implemented, they would result in a reduction of 2%; that if there were to be changes in the book of quantum, they would result in a 1% reduction; and that if the PIAB was to be involved, it would result in a reduction of 7.6%? That was very clear and verifiable. My concern is that while we need to do this in respect of the book of quantum and see An Garda Síochána taking enforcing action on fraudulent claims, there is no guarantee that any of the reductions will be passed on to customers. Past experience shows that the industry will just pocket the money.

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