Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I thank the Chairman for facilitating me, as sponsor of the Judicial Council (Amendment) Bill 2021, to make opening remarks before I proceed to questioning Mr. Boland of the Alliance for Insurance Reform, who I welcome to the meeting. I also wish to welcome Ms Moyagh Murdock of Insurance Ireland, who will be appearing before the committee later. Before we start, it is important to give my perspective on the legislation.

The personal injuries guidelines have been in effect for just over a year. This was a direct result of the Judicial Council Act, which received cross-party support in these Houses in 2019. These personal injuries guidelines had a very specific objective, namely, to drive down award levels for personal injuries and in turn, to drive down insurance premiums. This was a reform that the insurance industry lobbied for over many years. Some of the largest players gave cast-iron commitments before this committee that they would pass on these savings to their customers euro for euro.

Since guidelines came into effect, award levels through PIAB have fallen by 42%. This will pass through to the courts in due course. Unless these savings are passed on to consumers, these guidelines provide a windfall for the industry. There is no mechanism available to the Dáil, the Government or indeed the Central Bank to monitor whether these savings are being or have been passed on to consumers. While the NCID provides granular and highly valuable data on price and claim trends, it does not detail the relationship between these trends or attribute one to the other.

This point was made clear by representatives of the Central Bank at this committee on 8 December, where they said that while the national information claims database can monitor premium trends, it cannot disentangle premium trends to specific reforms or attribute them to specific reforms and nor can it create a counterfactual scenario. That is precisely what we need if we are to ensure that consumers see the benefits of the personal injury guidelines and the Judicial Council Act 2019. That is the purpose of this legislation before us.

What would the legislation do? It would require individual insurers to provide annual reports for a period of four years to the Central Bank and it would require them to outline the amount paid in third-party personal injury claims and how much would have been paid had the personal injury guidelines not come into effect. It would also require them to outline the average premiums charged and what would have been charged had the personal injury guidelines not come into effect, with this information audited by a qualified auditor. This information would then be presented to the Central Bank and the Minister and laid before both Houses of the Oireachtas. This would ensure transparency and accountability.

As to whether there is a precedent for this, yes, there is. Under regulations now enforced in Britain, AIG, AXA, Alliance, Aviva, Zurich and RSA, which are all the biggest players here in Ireland, will be required to provide similar information to the Financial Conduct Authority, FCA, with respect to whiplash awards. Are these provisions stronger? Yes, they are but that is a good thing.

I recognise that broader reforms are necessary in the insurance sector, including through reforms in the duty of care which Mr. Boland has mentioned in his opening statement, reforms to PIAB and increased competition. However this legislation would provide a mechanism, which does not currently exist, to hold individual insurance companies to account, to ensure that the personal injury guidelines in whole or in part do not provide a windfall in savings to insurance companies but instead benefit consumers, individuals and businesses through lower insurance premiums.

That is my opening statement outlining, as we begin detailed legislative scrutiny on this legislation, the intentions behind the Judicial Council (Amendment) Bill 2021 as its author. I will now turn to Mr. Boland with regard to the survey that the Alliance for Insurance Reform carried out with quite a number of respondents. I think there were 954 respondents. What was the average decrease since these guidelines have come into effect with regard to insurance for businesses?