Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

This is a technical amendment which deals with the definition of voluntary winding-up proceedings. I have no issue with that. I welcome the legislation, as I did on Second Stage, although I will tease through some of the issues. In the main, as the Minister of State said, this is a directive we are required to transpose and we have already missed the deadline for its transposition. For many people who are concerned about motor insurance costs, it is not going to change the dial with regard to their premiums. We are familiar with the Central Bank release yesterday which showed that premiums last year rose at a marginal rate, although industry officials had told this committee we should see premiums go down by about 20% as a result of the reforms. Premiums have dropped since 2017, which is to be welcomed, but we can see from the profits the industry is making that, despite the reforms passed by this House, by this committee and by members of the Dáil and Seanad, the benefits have not been fully passed on to the consumer.

There is legislation before this committee but, five weeks on, we still do not have a money message, which is something the Government could waive if it so wished. That legislation would require insurance companies to state very clearly, through audited accounts, whether the benefits of the reforms that have been passed by these Houses have been passed on in full, euro for euro, pound for pound, to the consumer instead of bumping up their profits. That is what they committed to at this committee when they pleaded with us to bring in some of the reforms that have since been enacted.

We are dealing with motor insurance and, as I said, we have seen a slight increase in premiums in the past year when we had expected them to go down. We also know that one of the main drivers of profits for the insurance industry is the investment arm of the business. With the interest rate environment where it is, we should see premiums further reduce, given that one of the triggers for premium increases in the first instance was that insurance rates and the yields from Government bonds dropped substantially. However, given current ECB rates and the monetary position, the returns are now far greater.

What is very worrying and is an issue I have raised with the Government is that, despite this legislation, according to the CSO, motor insurance premiums have been increasing every single month for the past ten months. I am sure the Minister of State is also hearing the anecdotal evidence. We are going to have to wait for another year until we see the Central Bank data but we are hearing enough in our constituencies and from the CSO to tell us they are going up month by month. There is a serious problem with motor insurance premiums. The industry will give us reasons with regard to the cost of claims, the frequency of claims and so on. However, the reality is we brought in reforms that have reduced costs for the industry. When members of the insurance industry sat where the Minister of State is sitting today and the members of this committee asked them what type of profits they were looking for in the context of making sure the benefits would be passed on to consumers, they said that what they were chasing was about a 4% return. The returns are currently about 12%. The Central Bank two years ago called them “bumper” or “bonanza” profits for the industry. What is happening is off the Richter scale and it is ordinary individuals who are suffering as a result.

I say that in the context of the Government talking about its insurance reform package, and that is only for motor insurance. I run a festival in Donegal and the insurance premium is approximately €6,000. It is a major festival with an overall cost of about €300,000. There are festivals in my county that are not going ahead because of insurance costs. There are small local community festivals and walking tours that are not going ahead, and clubs cannot get insurance because premiums have gone up every single year for public liability and employer’s liability.

While I am digressing a little, the Minister of State talked about the Government reform package. I want to make clear we are seeing a different trend with motor insurance. There is legislation but I am not clear if the Government is going to support it when it comes before the committee next Wednesday. The second point is we are not seeing any benefit with regard to public liability and employer’s liability, and that is witnessed by events being cancelled or closed down.