John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann shall consider the Report of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach entitled, "Report on the Rising Costs of Motor Insurance", copies of which were laid before Dáil Éireann on 24th November 2016.

I welcome the report and thank committee members who put significant amounts of time into drafting it and our public hearings in the course of our examination of the issue. While many are mentioned in the report, the committee secretariat needs a special mention because of the long hours its staff put into the research and presentation of the report. They were professional in their approach.

Arising from the 2016 general election and the general knowledge of insurance prior to that, committee members believed this topic was an important one that affected the economic growth and prosperity of the country. It affects every citizen and business. We need to do something about the rising cost of premiums for motor insurance and, as we found during our hearings, public liability, employers' liability insurance and so on.

We did go beyond the groups affected by motor insurance and we invited the Licensed Vintners Association and the Dublin publicans to give us their perspective on what they see as a huge threat to their business. Therefore, while we are talking about the motor insurance business it is the claims and the process leading to those claims for both motor insurance and other insurance that are driving up insurance premia. Over a three year period it was found by the Central Statistics Office, CSO, that insurance costs increased by 70%.

Speaking to the report and knowing the content of the Minister of State's report and following our recent exchanges with him our efforts in this area will be judged on the outcomes by those who are paying the premia. Those who are being ripped off by insurance companies and have to pay the premia will not thank us if we do not immediately implement the recommendations put before us today in the committee's report, and over a shorter period than envisaged by the Minister of State. There are 71 recommendations. I thank the Minister of State and his officials for the good exchange we had and the information they supplied us with that fed into the outcomes in the report.

It was clear during the course of those hearings that Insurance Ireland was not giving the full range of information it collects. Insurance Ireland makes available information to the Central Bank on the basis of the requests from the bank about the information required rather than the full extent of the information it holds. In the course of the hearings, the one issue that arose was the conflict between every single stakeholder and the lack of information. It is that lack of information that is causing a narrowing of the market to the few players we now have because when those who are outside the country seek to determine whether they will participate the only information they can get is through Insurance Ireland, and they pay dearly for it through an agent. That is what came out in the hearings.

The book of quantum, which is now updated but was not updated for some time, is a key factor in the debate because it informs the market and those outside of this country looking at the market as to what the potential claims might be. What we discovered was, for example, the significant difference between what is paid for whiplash in Ireland compared to the UK. As we said to the Minister of State this morning, there is a need to analyse the full extent of the awards made by the Court of Appeal and the other courts feeding into that so that the book of quantum can be an extensive analysis of the awards that are being paid out. Let us compare that then to the UK, Northern Ireland and other European Union jurisdictions so the judicial system can be informed of the amounts of money we are talking about. One of the main players is the judicial system and the awards process. While we recognise the separation of powers between this House and the judicial system it is only fair that we would say to judges that they should analyse the information that will be given to them in the context of the book of quantum. That would help them to be roundly informed of the issue. Following this debate I hope they will hear the concern Members have about the threat to the economy by way of the increases in insurance premia.

The examples we have relate to the various components of the SME sector which told us that insurance has increased beyond affordability for some businesses which could not get their insurance renewed because it was impossible for them. The extra cost they must pay is borne by the business and puts the sustainability of a business on the line, which mean it is a threat to business.

In addition, older people can no longer get cover. It just comes to an end. There is no regard for their accident-free record or the fact that their car has passed its NCT and everything is okay. It is just a decision by the insurance company not to provide cover. When pressed, companies give a quote that is so excessive as to be unaffordable. That is not fair to an age group that has worked hard to create the country in which we live. They have made their contribution and they should not be hindered in their efforts to get insurance.

Another cohort of people that wrote to the committee in considerable numbers was individuals returning from abroad and trying to get work. They found they were unable to renew their insurance easily on returning to this country. Likewise, young people living here who were new to the employment market who wanted to get insurance or those who had a car of a certain age could not get insurance. In some cases new drivers were not even quoted for insurance. There have also been ridiculously high increases in premia which is not explained in the documentation they receive from insurance companies. That is another gap in the information that should be available. People want to know why their premium has increased and what is going on.

It is clear that as insurance companies prepare for the next tranche of regulation they are covering their losses and potential losses to such an extent that it is not bearable in the market. It is also clear in the report that far from losing money insurance companies were making considerable amounts of money over many years. I accept they experienced a blip following the crash, as did most businesses, but that changed significantly subsequently. There is no real explanation for the increase in premia. That brings me back to our 71 recommendations and the report of the Minister of State.

I referred previously to the book of quantum. The other area, which I firmly believe is important is one I raised this morning with the Chief Whip and Minister of State, Deputy Regina Doherty, because she is responsible for the CSO Vote. The CSO should be involved in the collection of data on insurance because it is an independent and respected organisation with the capability to collect the data necessary and to make it available to the Irish market and also to those who might seek to come into the market. The office has a staff of 750 and it has the capability to do the work required. The office is professional and is recognised as such, which is hugely important. We should involve the CSO in what we are doing. I say that to counter the argument that it should be the job of the Central Bank. The Central Bank has abandoned the consumer. Having read all the complaints, I have come to the conclusion that it is not interested in consumer protection. I accept the office has an individual who has responsibility for consumer protection but I do not know anyone who has received protection. I do not know anyone who has got answers. Neither do I know any insurance company that has been hauled over the coals for its attitude to individuals in the marketplace. The individual person or small business seeking a quote does not matter to the Central Bank.

They are not significant enough in the big picture plan it has but they are significant to me and the Members of this House who represent them and who see at first hand every single day big insurance companies taking huge premiums from individuals who cannot afford to pay them. Yes, they must pay for insurance but not at the price currently being asked.

I believe the Central Bank's regulation of insurance companies needs to be far more heavy-handed in the context of making them comply. One factor that feeds into the increase in premiums is the fact that Irish companies are asked to pick up the tab for a failed insurance company. So many Irish people have been caught by a failed company with headquarters outside Ireland. We must find a method of ensuring they are regulated and that some fund is in place that can be relied on should one of those companies go bust in the future. To request businesses to pay for a business that has gone bust seems to be a perverse notion. If one of my competitors went bust, I certainly would not be looking to assist or bail them out. The Government needs to produce some strategy relating to how it deals with this.

The Personal Injuries Assessment Board has functioned extremely well but it needs to be modernised and its powers expanded. I know the Minister of State, Deputy Eoghan Murphy, disagrees with this and I understand his argument but I still suggest that if certain legal fees could be paid at that level, it might discourage those who are simply trying to cover their costs and get their affairs sorted from going to a higher court. The court would not be clogged up, more expensive lawyers at that level would not be required and the costs would be sorted out at that level. There are simple measures to implement legislation that has not been commenced that we need to consider.

The Minister of State needs to look at the legislation introduced by the former Minister for Justice and Equality, Alan Shatter, in respect of jurisdiction. This needs to be reversed. I refer to sending definite signals to the industry that the Minister of State means business. I admire the work he has done and his grasp of the brief but sending positive signals in a shorter period of time would tell the market the Government means business, is not rolling over any more, is acting in the interests of the consumer and will make sure that the Central Bank, the CSO and others will get into the act and ensure that premiums in the future are reduced significantly because people cannot afford them now.

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