Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I welcome this debate. We are discussing two reports: the Minister of State's report and that produced by the Committee on Finance, Public Expenditure and Reform, and Taoiseach, which is chaired by Deputy McGuinness and of which I am also a member. My amendment called on the committee to undertake that work. The Chairman prioritised that work because we can all see the type of pressure that has been put on individuals and businesses throughout the State in recent years. It was about time that action was taken on this matter.

I appreciate that the Minister of State has put a lot of work into this, but I am frustrated by the amount of time it took him to begin the process. We questioned the Minister for Finance time and time again about when he would begin dealing with motor insurance. This predates the Minister of State's work because it has been going on for a number of years. I am saying this because the horse has bolted. We heard statistics from other colleagues in the House concerning the increases year on year, and I do not want to rehash those. We know, however, that over the past three years there has been a 70% increase in premiums. The Central Statistics Office says that, last year, premiums increased by just under 9%. Looking at the last quarter, increases were marginal and in some cases there were no increases, although the last month has shown a month-on-month rise of about 1.8%, which is alarming.

The insurance companies have done the dirty deed. They have completely and utterly fleeced their customers. They have done so because they pursued a reckless policy. They had a model which the ordinary lay person would say was based on taking premiums and then gambling with them, although they called that investing them in international stock markets. They gambled and expected a return of 4% or 5% on safe government bonds. However, because of what the ECB has done with quantitative easing, we all know that investing in German bonds, and in some cases in Irish bonds, means the returns are negative. That is what happened.

I mean no offence to any of the previous speakers but we are talking about things that are marginal to what happened over the past three years. That is why I was forced to amend the original motion. At the time, I commended the Deputy on bringing forward the motion, but it fell into that trap which is what the insurance industry wants us to believe, that this is about fraud, high legal fees, uninsured drivers or the risk of something that has not happened, such as Setanta Insurance or changes to the courts. That is all bullshit, however. It is absolute nonsense. That is not what caused a 70% increase in premiums. I challenge anybody, in either report, to show us that is the case.

The Minister of State's report talks about fraud in the context of a footnote. There are about 15 recommendations concerning fraud, which I welcome. Anybody who denies there is fraudulent activity going on in motor insurance would be a fool. We all have to work together to stamp it out and get to the core of what caused drivers to be fleeced. Some people who required their business vehicles to keep food on the table found their mental health was seriously impacted. There is no evidence to suggest, however, that fraud has increased over the past three years and the same applies to legal fees. The Minister of State's report says that increases in legal fees do not contribute to a significant increase in premiums. Of course they do not.

Meanwhile, the industry peddles the idea that it is because of Setanta Insurance. If Setanta Insurance had to pay up in the morning, it would cost €90 million, yet the insurance companies have increased premiums over the past three years by multiples of that. Therefore, it is not that either, so what is it? It concerns the model they had, which was rightly identified in the committee's report but is completely absent in the Minister of State's report.

The Minister of State's recommendations should be implemented, but let me add a caveat. In no way should we be privatising our police force. In no way should we be allowing multinational companies to fund members of the Garda Síochána directly. It is unacceptable and will not be accepted on Sinn Féin's watch. I understand the motivation for it. The Minister of State says it is being pushed heavily by the industry and that the model is in place in Britain, but it is a flawed model. The London Metropolitan Police has been doing this since 2012 or 2013, but it has also been doing other things. There is a privatisation agenda concerning the police and other sectors in Britain, but we should not follow that model.

Those recommendations are fine in other areas. The timeframe for them is incredible in my view. Some of them are obvious, such as the action points. For example, we are told the Department will monitor EU developments. I would have serious concerns if the Department was not monitoring them, so that does not merit being put down as an action point.

Another action point was for the industry to develop a protocol by quarter 2 and another one by quarter 4. As regards the third action point, the industry will say it has done that. The number of action points has been beefed up a bit with some things which are not really action points, but that could be seen as nit-picking.

My concern about some of the action points is the delay in implementing them. Let us look at drivers who had to leave this country. By the end of quarter 2 of this year we will have a protocol to recognise the experience of drivers who are driving in England. That does not make sense. Why is it not in the interests of the insurance industry? They are driving on the same roads. If I go to England my insurance premium does not go up and I do not have to get new insurance. In addition, we have to wait another six months to get a protocol agreed for those who drive on the other side of the road. It is incredible. If I go to France I do not have to get a special dispensation from my insurance company that I am going there for a month and will be driving there. If I am insured, the policy covers me across Europe. Why would one have to wait for six months when Insurance Ireland already has a protocol to accept the experience and no claims bonus of returning emigrants, which is available on its website?

If all of this had been implemented three years ago, would it have prevented a 70% increase in premiums? No, it would not. That is because something different happened. It was a flawed business model by the insurance industry. I am not quoting him directly but the then Central Bank governor, Mr. Honohan, said that they were involved in risky practices and started to use up their capital reserves. That is what happened. New CEOs were put in place across the insurance companies, and because this State makes it compulsory to have motor insurance, it was like shooting fish in a barrel. One after another, therefore, we got our increased renewals in. This report will not do anything about that, however, because the motion passed in this House was to investigate the Central Bank's handling of the matter, and it has not been done.

The Central Bank's handling of consumer protection issues, and this is not directed at any individuals in the Central Bank, whom I am sure are working hard, was pathetic and unbelievable. Some 15,000 people will be repaid for tracker mortgages. Some 22% of all payment protection insurance sold in this country was paid back just two years ago in the sum of more than €70 million. If that happened in any other industry, such as high street shops, they would all be in Mountjoy jail. It is big business, however, so instead of holding them to account we say they should pay for our police They give us a few pounds and indirectly employ gardaí to help them increase their profits.

That is what the Minister of State is doing here. The recommendation the Government brought forward is unbelievable. What is more unbelievable is the fact that the Government has not dealt with the boom-and-bust business model the insurance companies have used. That boom-and-bust cycle must be broken. They have sorted out their books and it is unlikely that we will see further massive increases. However, as somebody who 20 years ago began his first campaign outside of a political party on the rising costs of motor insurance, I guarantee that this will happen again unless the Government tackles the Central Bank issue or authorises direct state intervention in the insurance market.

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