Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I intend to take ten minutes at the outset.

I move:

“That Dáil Éireann:is concerned that:

— consumers have been faced with an increase of over 60 per cent in the cost of their motor insurance since January 2014, with a 34 per cent increase in the last 12 months alone; and

— commercial users have also experienced large increases in their motor insurance premiums;

notes that:

— there is an obligation on the State to act when motor insurance premiums become unaffordable and put families and businesses under severe pressure;

— when the issue of industry profitability was previously examined by the Motor Insurance Advisory Board in the 1990s, it was found that the Irish insurance sector had profitability levels that were multiples of the United Kingdom;

— up to 80 per cent of personal injury claims lodged with the Injuries Board are not subsequently settled through them;

— greater transparency regarding the cost of settling claims or awards in personal injuries cases that do not go through the courts or the Injuries Board is needed; and

— a reduction in resources for the Garda Traffic Corps puts lives at unnecessary risk;

welcomes an emerging trend where cases of suspected insurance fraud are being successfully contested in the courts by insurers; and

calls for:

— the establishment of a task force along the lines of the successful Motor Insurance Advisory Board, which led to a considerable fall in insurance costs up to 2013:

— to tackle rising motor insurance premiums;

— review the role of the Injuries Board; and

— examine the reasons for the current turmoil in the insurance market;

— improved transparency of insurance industry profits and the establishment of a national claims register and a motor insurance database to record data across the sector;

— enhanced disclosure for consumers around policy renewal notifications including an obligation on insurers to inform customers of the change in their premium from the previous year;

— legislative reform to increase the penalties for false and exaggerated claims;

— greater clarity as to the respective roles of the Motor Insurance Bureau of Ireland and the Insurance Compensation Fund;

— a review of road traffic legislation to prevent the use of technicalities to avoid a conviction for motoring offences;

— improved regulatory oversight domestically and at European level, including the filling of vacancies in the Central Bank of Ireland Enforcement Directorate which deals with insurance firms; and

— action to protect low-income and vulnerable customers from unfair practices by insurance firms, including a refusal to quote for older cars which have a valid National Car Test (NCT) certificate.

I welcome the opportunity to raise the vital issue of motor insurance premiums in the House by way of this Fianna Fáil motion. I acknowledge the work of my colleagues, Deputy Niall Collins, our spokesperson on enterprise and jobs, and the Acting Chairman, Deputy Troy, who is the party's spokesperson on transport. Today's motion coincides with the launch by the party of a policy paper on motor insurance premiums.

As the Minister of State knows, since the beginning of 2014, motor insurance premiums have gone up by 60%. In the last 12 months alone the increase has been 34%, according to the CSO's monthly statistics. The current situation is completely unsustainable and action is needed now to address the issue and deal with spiralling motor insurance costs.

The motor insurance premium increases we are witnessing are having a particularly hard effect on younger and older drivers, as well as those driving older vehicles. No one is immune from these effects, however. Since we publicised this motion in recent days, we have been inundated with constituents telling us their own stories. Increases in the last year of the order of €200 seem typical from the feedback I am getting from constituents, while increases of over €300 are not uncommon. In some cases, far greater increases are occurring in the marketplace.

The insurance industry is defending its own position and that of its members, while the legal profession is defending its members' interests. The Central Bank seems to be preoccupied with the underlying financial health of the insurance industry and insurance companies, which is an important issue that cannot be ignored. The Injuries Board is defending its position and says it is doing a good job. I have to ask, however, who is looking after the consumers? Who is looking after the motorists who are getting motor insurance renewals through the door with increases of several hundred euro? It is not just an issue for private motorists; it is also one for the business community. It concerns not only hauliers, but also many other businesses throughout the country for which transportation is a key cost, as is insurance.

This is an important economic issue for the country, as well as being a vital one for individuals affected by the current level of premium increases. The thrust of our motion is to call for the establishment of a task force along the lines of the Motor Insurance Advisory Board, which operated successfully for a number of years when it began in the late 1990s. At that time, motor insurance premiums were also increasing rapidly, but they are now increasing at an even faster rate.

We really need to get a handle on the data. The insurance industry says the main reason motor insurance premiums are rising is the number and cost of claims. We cannot validate that, however, because at least three quarters of all motor-related insurance claims do not go through the Injuries Board or the courts for final settlement. The vast majority of claims are settled privately by insurance companies with individual claimants. While the insurance industry, and individual companies, issue aggregate reports to the Central Bank, we do not have a national claims register. This country is crying out for such a register whereby all the data on settled claims are properly recorded. Lessons could then be drawn from an analysis of those data. That is what is really lacking at the moment.

It is startling to think that there is no public record of 75% to 80% of claims, which would allow them to be assessed and analysed and have policy lessons drawn from them. Having spoken to journalists today, I gather that the Government will not oppose the motion tomorrow. I welcome that, but more important is the need to act on what this motion says. It would be unacceptable for the Government not to call a vote on a motion but then to ignore its contents. If the Government is supportive of this motion then it will have to implement its aims.

Along with my colleagues, I have consistently raised this matter with the Minister for Finance, Deputy Noonan, and his Government colleagues over the past year. The Minister's response has been to establish a Department of Finance-led review. That is an inadequate initiative, however, as well as being an inadequate response to the scale of the problem that motorists are currently facing due to motor insurance premium increases. We therefore want to see a new task force established, which will listen to the industry and the Central Bank. It will also involve a number of Government Departments, including Finance, Transport, Tourism and Sport, and Jobs, Enterprise and Innovation. In addition, it will involve the Garda Síochána and the Injuries Board, but, most importantly, it will listen to the end consumers, including motorists and families who are no longer able to fund the cost of cover for younger family members.

In recent days, dozens of individual examples have been brought to my attention. One person said that last year their insurance was €540 but this year the insurer quoted a renewal cost of €880, which is an increase of €340. Another person said their premium was increased by 70% despite a full no-claims record. The typical increase seems to be of the order of €200 to €300.

I fully acknowledge the fact that there are many reasons behind the level of increase we are witnessing in motor insurance premiums, including false, fraudulent or exaggerated claims. That needs to be dealt with, and when people present such claims they need to be punished. I am not sure we are going far enough with them at the moment, but I welcome the fact that some such cases have been brought before the courts.

The collapse of Setanta Insurance was over two years ago, yet the fallout from that is still being played out in the courts. It is going to the Supreme Court because the Motor Insurance Bureau of Ireland is not accepting the High Court decision. Essentially, we have the Insurance Compensation Fund and the Motor Insurance Bureau of Ireland at each other's throats. In that case, the 70,000 Setanta customers are losing out, including thousands who have outstanding claims in the system. That is a measure of a dysfunctional approach to the insurance market which needs to be dealt with. We therefore need greater clarity on the respective roles of the aforementioned bodies.

Through a reply to a parliamentary question, I have discovered that the enforcement division of the Central Bank, which is responsible for supervising the insurance sector, has a staff vacancy rate of 25%. That matter also needs to be urgently addressed.

The Injuries Board has been successful and has dealt with about 100,000 cases since its inception in 2004, but its role needs to be reviewed. The motor insurance industry acknowledges that improvements could be made to that particular system, even though it has worked well.

I acknowledge that there was under-pricing in the motor insurance market for a number of years, and we are now seeing the fallout from that. We had the collapse of Quinn Insurance, as a result of which every policy holder is paying a 2% levy. They will be doing so probably for another 12 to 15 years on every single policy that is renewed annually. The Road Safety Authority has had significant problems as well.

Consumers want action to deal with this situation. The Minister has taken some action but it is insufficient. A Department of Finance-led review is not the way to go. We need an independent task force in this regard. We do not need to reinvent the wheel. We had a successful Motor Insurance Advisory Board, which should be reconstituted as a matter of urgency. It should be given the task of identifying the underlying reasons behind the spiralling cost of motor insurance. We can debate what those reasons are, but let us get the data. We urgently require a national claims register. Before the Minister for Finance came to the Chamber I pointed out that in the region of 80% of all claims are now settled without any public record being kept through the Injuries Board or the judicial process.

We are in the dark, so when the industry tells us it is all about the cost and number of claims, we cannot independently validate that and deal with it. We need a task force, as a priority, to get to the bottom of what is causing the rate of increase in motor insurance premiums and to make recommendations for dealing with that. I am sure the House would not be slow in acceding to those. The current situation is untenable. The forecasts are for further increases of 25% to 30% in the next 12 months, so we must deal with this issue. The motion is intended to be positive and constructive and to chart a way forward for dealing with a very important issue for families and businesses throughout the country.

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