Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am pleased to be in the House. It is a great honour to be a Member of the Thirty-second Dáil and to have heard the contributions of many new and returning Members on all sides of the House. I hope this Dáil lasts for some period of time. It is a surreal experience to see everyone talking as though everything is normal when we are in a situation that is anything but normal. I share the views expressed during the debate by Deputies on all sides of the House to the effect that this period of political impasse can end in order that we can get on with tackling the many issues Deputies have raised about this important sector, the insurance industry and cost of the insurance industry. I wish you all the very best in your role as well, a Cheann Comhairle.

The insurance sector makes a vital contribution to the economy through employment, attracting global capital and, most important, through serving the needs of our consumers. Insurers play a key role in providing the stable long-term investment needed to drive sustainable economic growth. I look forward to seeing this sector continuing to grow and provide more employment. We are working closely with the sector through the IFS 2020 strategy in terms of attracting more foreign direct investment in this sector to our country, especially into regions throughout the country.

The discussion today has been about the cost and availability of insurance for people and businesses. The cost of insurance affects businesses in terms of their ability to price competitively, employ more people and innovate. Community and voluntary groups are affected in their ability to provide services and events that enhance community life. Motorists, householders and families are affected by the cost of motoring. The issue of flood insurance, an issue I am familiar with, has come to the fore again in 2015 and I will comment on that in a moment.

The Minister for Finance pointed out in his opening statement that the Department of Finance is close to completing its work on the review of the motor insurance compensation. It is carrying out this review jointly with the Department of Transport, Tourism and Sport. It should be remembered that this is a complex issue in respect of which it is important that any changes made do not result in unintended consequences for policyholders, the Exchequer or the industry. Taking this into account, the review, which started in January of this year, is being completed as quickly as possible, but it is also being done in a thorough manner. When it is completed in the coming weeks, the Department will continue its work in respect of the overall review of policy in the insurance sector. The cost of insurance will be an issue of particular focus. I believe we all agree that it is important for this review to have a successful outcome. In other words, we wish to see the cost of insurance reducing as a result. That is a shared objective of all Members. However, this is not straightforward. Insurance premiums cannot be directly influenced and the Government cannot interfere in how insurance companies price their insurance products. Moreover, insurance premiums have a renewal cycle, so whatever improvements can be generated will only be seen by individuals over time.

The Solvency II directive came into effect on 1 January 2016. It represents a substantial overhaul of the risk evaluations in European insurance regulation. It sets out new stronger EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection, something that is important to achieve. It is expected that this new regime should reduce the possibility of consumer loss or market disruption in insurance. Solvency rules have a consistent application across the European Union.

I wish to focus on the issue of flood insurance because it is an issue that has particular relevance to me in my current role as Minister of State with responsibility for the Office of Public Works. The State is going to invest €430 million in putting in place capital flood defences in the coming five years. This means the country is going to spend more on flood relief projects in the coming five years than we have spent in the past 20 years. If taxpayers are to do that and fork out significant funds to put in place robust flood defences, clearly it is not acceptable that at the end of that process there are still people in towns and villages in Ireland who cannot access flood insurance. If we accept that as the starting point, the question is how we tackle the issues.

The Taoiseach had the chief executives of a number of insurance companies in and we had a good robust discussion with them. The Department of Finance is carrying out a review of best international practice and what other countries do. The relevant group is due to report to the Government in June and whoever is in government in June will have policy options.

People have spoken about the United Kingdom flood relief system. I am very interested in looking at it, but that system has only been in place for 16 days. It came into effect on 4 April this year in the United Kingdom. Let us see how that beds down. It does not include small businesses; it only includes householders. We have an open mind. I heard Deputy Troy refer to the Fianna Fáil Bill. No side of the House has a monopoly of wisdom on this. We have an open mind but we must ensure we do not have unintended consequences. We have no wish to put up the cost of insurance for a large number of insurance holders to ensure a small number can get it. We have to get this balance right and that will be the challenge.

Deputy McGuinness raised several cases. If he wishes to pass on those details, I will bring them to the attention of the relevant Ministers.

We have a great deal to do. On the issue of insurance as a whole, the Minister mentioned the lack of insurance data and statistics. This is an important point. The lack of data presents difficulties from a policy analysis and development perspective. It is important that data are gathered in a comprehensive format and presented in a standard format. As mentioned earlier, the Government is supportive of the industry trying to make progress on this point. We are speaking in terms of specific measures, targets and results. This means that whatever recommendations arise from the various reviews in the Department of Finance, we are going to need a whole-of-government approach and the collective wisdom of this House. Once we get beyond this political impasse I believe we can take many of the ideas that were garnered here this afternoon and make progress on them in the coming months.

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