Michael Harty (Clare, Independent) | Oireachtas source

Conor Pope's excellent article in The Irish Timeslast week stated the motor industry has let down the Irish consumer at almost every turn in recent years. First, it engaged in a reckless price war that left the balance sheet of too many companies in a ruinous state. Then, to make up for this shortcoming, it started hitting customers with massive price increases wildly out of line with inflation and out of proportion to claims. Few reasonable people would argue with this analysis.

Insurance companies, somewhat like banks, operate behind a veil of secrecy. They tell nobody what they are doing. They pay little attention to what the Government might say and continue on their merry way to extract as much cash as possible out of hard-pressed citizens. High insurance premiums hit disposal income and undermine overall competitiveness. They also put families under severe financial pressure.

We need to have greater transparency in how claims are calculated and how companies collect their data. If they collect sufficient data it should be made available to the general public. We need to know what type of claims are being made, what legal costs and other costs are incurred, what channels of resolution are being used and how these impact on the final settlements.

Without such data being available, proper assessment on appropriateness of premiums cannot be made. No one is denying insurance companies should make a profit. However, they should make a reasonable profit and not an excessive profit. Haulage companies are being put under severe pressure regarding their premiums. Some are being priced out of the market. Others are having to arrange insurance in other EU states where prices are more affordable.

Emigrants returning to Ireland, who have been driving abroad for many years, are treated like novice drivers when they return home. They are charged as if they had no driving experience. We need to treat our returning emigrants, our professionals and our tradesmen coming home to Ireland as the economy improves, properly and fairly. We need to recognise they do have driving experience and they should not be treated as novices.

Deciding not to quote, or to quote an exorbitant quote, for cars above a certain age is unacceptable. If a car has a valid national car test, NCT, which is a legal requirement, then the owner should not be discriminated against. This is occurring repeatedly. These are usually starter cars mainly for young people but they may befor people who are in financial difficulty and cannot afford a new car. Pricing them out of the insurance market is another barrier to those drivers getting on the road. That is entirely unacceptable.

Many personal injury payouts relate to car accidents that pay out excessively high claims with high legal costs. This is a huge burden upon the insurance industry. I refer to 80% of road traffic accident personal injuries being of a soft tissue nature, with whiplash injuries being one of the most common complaints. In my medical practice, I have seen many spurious whiplash injuries coming through and succeeding in the courts. It is quite difficult to understand this. Whiplash payouts in Ireland are three times higher than in the UK. There is no difference between an Irish and an English whiplash, but the payouts are three times greater.

The Irish College of General Practitioners, in a submission to the Personal Injuries Commission, described many whiplash claims as spurious. While many claims are genuine, some are not. The Motor Insurance Bureau of Ireland believes as many as one in eight claims are spurious and suspicious. There is a well known condition in medicine known as compensation neurosis. This is where exaggerated symptoms develop. Patients develop the sick role. They develop sick behaviour only for the symptoms to miraculously disappear once the monetary payment is made.

It is a well known medical condition cured by money which is, of course, to be welcomed. However, it is serious pressure on the insurance companies. Excessive and fraudulent payouts drive up the cost of motor insurance. This motion calls on the Central Bank to allow increased regulated competition in the Irish market from EU insurance companies. This is to ensure comprehensive data are recorded and made public so that real transparency is available in how premiums are calculated and how claims are settled and to ensure best international practice is followed so that Irish people are not discriminated against when premiums are calculated.

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