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

I move:

That Dáil Éireann:

recognises that:

— micro-, small- and medium-sized enterprises currently employ nearly 970,000 people in Ireland according to the Central Statistics Office, which represents around 44 per cent of all those employed;

— the cost of doing business in Ireland has been cited by the National Competitiveness Council as a major concern;

— many businesses are reporting large increases in employer and public liability insurance premiums;

— the cost of employer liability insurance and public liability insurance is a direct threat to the competitiveness and sustainability of many businesses throughout the country, including micro-, small- and medium-sized enterprises;

— the greater use of insurance excess and insurance exclusions is increasing the cost of insurance by the back door;

— without urgent action, insurance premiums will soon become unsustainable for many businesses;

— as a result, a greater number of businesses will not take out insurance at all and this practice is extremely risky and threatens the viability of the businesses involved;

— there is currently no data collected tracking the changes in premiums for employer liability and public liability, which means the problem remains under the surface;

— the Cost of Insurance Working Group has set a deadline of the end of 2018 for the feasibility study for creating such an index, which implies that the index will not be in place until well into 2019 if not later;

— the Central Bank of Ireland has a deadline of the end of 2019 for a feasibility study on whether employer liability and public liability insurance data should be included in the National Claims Information Database;

— insurance fraud is one of the many reasons why insurance premiums are high and no data is currently published by the Courts Service on the number of instances of fraudulent and exaggerated claims;

— in many instances, insurance companies are not challenging claims they believe to be dubious and potentially fraudulent;

— there is a real or perceived lack of consistency in the awards handed out for personal injury claims;

— the second report from the Personal Injury Commission on benchmarking personal injury claims in Ireland versus other jurisdictions is urgently required; and

— insurance companies use non-disclosure at the point of a claim rather than at the policy proposal stage in order to avoid the payment of a claim; and

calls on the Government to:

— urgently tackle the 15 action points in the Cost of the Insurance Working Group's Report on the Cost of Employer and Public Liability Insurance that are due to be completed in the first half of this year;

— legally oblige insurers to provide a breakdown of the premium cost to the business and to provide more information to the business on how premiums are calculated;

— ensure that the Personal Injuries Assessment Board (PIAB) Book of Quantum is updated at least once every three years;

— ensure that the research on the PIAB Book of Quantum is based on medical evidence and cost, not solely on historic claims;

— bring forward the deadline for the feasibility study on including employer liability and public liability data on the National Claims Information Database from the fourth quarter of 2019;

— work towards creating a single European market for insurance to better enable businesses to shop around for employer and public liability insurance;

— bring in tougher penalties, both financial and otherwise, for insurance fraud and claim exaggeration;

— establish a declined insurance mechanism for employer and public liability insurance;

— legally oblige insurance companies to notify policyholders of claims made against them before settlement, the amount a claim was settled for and the reasons why the claim was settled; and

— bring forward the deadline for the Department of Finance and the Central Statistics Office to report on the creation of a price index for employer and public liability insurance premiums, and urgently establish such an index.

I am pleased to introduce the Fianna Fáil motion on business insurance. We are calling for urgent action from the Government to tackle rising insurance costs for businesses, particularly SMEs. I acknowledge all those in the Public Gallery who are directly affected by this issue. I thank Deputy Moynihan for the work he has done in highlighting this issue within the party and demanding that we take action.

The overall message for the Minister of State, Deputy D'Arcy, is that this issue must be a priority for Government. There is an enormous amount of anger and indeed frustration at the lack of progress in dealing with rising insurance costs. The Minister of State may talk about reforms that are due and that are being prepared for 2019 and 2020 but they are of no comfort to businesses that are struggling today and do not know how they are going to renew their insurance policy because they simply may not be here in a year or two years. This is also an issue for sports clubs, voluntary groups and community organisations. It is seeping into so many different strands of Irish life.

The increases in insurance premiums are dramatic for many businesses, particularly those in the retail and hospitality sectors, in particular pubs, restaurants, hotels and nightclubs. We do not have any CSO data unlike motor insurance but we have many real-life examples. I have heard so many of them. In the past couple of years, one business's premium went from €10,000 to €25,000 while that of another business went from €18,000 to €31,000. The premium for a large hospitality business like a hotel or nightclub could go from €80,000 to €230,000. That is the reality.

Those are just the changes to premiums. There are also changes to excess levels and exclusions are increasingly included in these policies. In many cases, the excess can be €10,000 to €20,000. Of course, it is very easy for an insurance company to make an award of up to the excess level because that is paid by the policyholder and not by the insurance company. There are many instances of exaggerated and downright fraudulent claims being settled instead of being challenged. This is what is happening in reality. There are cases where a policyholder has been pleading with the insurance company to contest and challenge claims only to find out that a payout has been made behind their back. In some cases, they are not even aware that a claim has been made. This is not an attack on legitimate compensation claims. There will always be accidents and those claims need to dealt with fairly and appropriately.

There is no transparency around how premiums are set by the insurance industry, how claims are settled and the settlement amounts themselves. We urgently need to fill the data gap. We need the national claims information database and a price index relating to employer liability and public liability insurance. We need to get tough with insurance fraud. We cannot even get the data about the number of cases that have been taken against people who have made fraudulent claims. That needs to be fixed immediately and we need tough penalties. People need to be referred to the gardaí and taken to court where they have made fraudulent claims. Where is the specialist unit for dealing with insurance fraud that was promised for An Garda Síochána? That needs to be dealt with. There are members of the legal profession who have questions to answer and who are doing a disservice to their own profession by taking claims they know have no substance whatsoever. Award levels urgently need to be benchmarked internationally. We need consistency in the level of awards. One of the reasons insurance companies are settling claims is because they have a fear of what will happen if they go to court and the level of award that will be made. We need to move to a system of care, not cash in many cases. That would be the game changer in our view.

We support the work of Personal Injuries Commission. We believe that there is a need to review the statute of limitations. At present, a person has two years to lodge a claim from his or her date of knowledge of an injury. However, in general, a business is only allowed to keep its CCTV records for one month so when a claim is made, a business might have had the evidence that it was a bogus claim but it now cannot contest it because one law is contradicting another law, which is a key issue.

Increasingly, people in business, and I know some of them, are taking a risk of having no insurance policy at all because of the cost of renewing their premium. It is a huge personal risk for them to take and it is not a road we want to see anyone going down.

The Government will have the full support of the Fianna Fáil Party if it genuinely seeks to tackle this issue. We have put pressure on the Government for the past couple of years regarding motor insurance, business insurance and insurance in the wider community sector. In parts of the hospitality sector there is no insurance competition, with Lloyds of the UK the only provider. That is a huge risk for those businesses. If that insurance firm decides to leave the Irish insurance market, where does that leave all those businesses and their employees?

We need urgency. I could cite several examples where there has been slippage in the recommendations. Many of the recommendations are soft enough anyway. They are about consultations and more reports, but people want action. Change is difficult, but we urge the Minister of State to call out those who are not playing their part and name them. We would support him in doing that.

I acknowledge the work of the Alliance for Insurance Reform which has played a very positive role in the issue so far.

Businesses will close and jobs will be lost. The lack of reform in the insurance sector is damaging the Irish economy. The Minister of State should use the mandate from this House to drive through the required reforms to bring some sense in the insurance market and protect Irish jobs.

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