Maurice Quinlivan (Limerick City, Sinn Fein) | Oireachtas source

I move amendment No. 1:

(a) To insert the following after “in order to avoid the payment of a claim; and”:"-- insurance contract law in Ireland is outdated and in many ways archaic;”

and(b) To insert the following after “and urgently establish such an index.”:“and

-- immediately provide a Money Message so that the Consumer Insurance Contracts Bill 2017 can proceed to Committee Stage.”

I am glad to hear that the Government will abstain in the vote, which means that the Fianna Fáil motion will be passed with the support of Sinn Féin. I acknowledge and welcome those in the Visitors Gallery who have come to listen to the debate.

Sinn Féin is happy to support the Fianna Fáil motion with the inclusion of our amendment which aims to free one of the many Bills brought forward by the Opposition that the Government is intent on burying. The Consumer Insurance Contracts Bill 2017 was drafted by our finance spokesperson, Deputy Pearse Doherty, and is aimed at addressing one of the many issues which contribute to the escalating cost of insurance for businesses. I hope Fianna Fáil and other parties will support the amendment, to which I will return.

Businesses are being bled dry by outrageous increases in insurance premiums which are forcing some low margin enterprises out of business. All Members will have been told by small SMEs and businesspeople that they cannot afford their insurance premiums because of the yearly increases. The CSO recorded an increase of 57% in insurance premiums between 2011 and 2016. The increase cannot be blamed solely on high pay-outs to meet injury costs. It requires reform of the way in which insurance companies operate. High pay-outs and fraud are not solely to blame, although they are contributory factors. Neither pay-outs for injuries nor insurance fraud is new, but the massive increases are. Therefore, I do not understand how the insurance companies expect us to believe everyone is to blame but them.

Insurance companies play a major role in the economy because they provide products such as motor, home and public liability insurance which many people are required to have. Because of their prominent and important position in the economy, insurance companies are not comparable to other undertakings and should be required to be far more transparent about their premiums and profits. Sinn Féin believes a much tougher stance can be taken by the Government with insurance companies. I have met the Competition and Consumer Protection Commission and raised this issue as a real concern. Its investigation of insurance companies is ongoing.

A number of businesses surveyed by Chambers Ireland for the latest report of the cost of insurance working group stated they had suffered increases of over 100% in their premiums, which is totally unacceptable. Some are being forced to opt for high excess levels in an effort to lower their premiums, something which can be very risky for a business if a claim is made. As other Deputies stated, some companies are not taking out insurance at all.

With Deputies Niall Collins and Tom Neville, I recently attended a meeting in Limerick of the Alliance for Insurance Reform. The non-political group brings together 20 civic and business organisations across Ireland which represent 35,000 members, over 633,000 employees and 41,300 volunteers, or a huge cross-section of people and businesses across the country who have been directly affected by increased insurance costs and forced to organise to try to fight back against the constant and unfair hikes in insurance costs. The Minister of State, Deputy Michael D’Arcy, met the alliance this week. After the meeting it expressed its intense disappointment at the slow pace of reform and stated policy holders had been thrown to the wolves by the Government. That is a damming indictment by a non-political organisation of the Government’s response to the massive problem of escalating insurance costs. It seems that the Government has been lobbied and taken in by vested interests and big business. That does not come as a surprise as Fine Gael is the party of big business, the wealthy and billionaires, including American billionaires whom it can help out when called on to so do, as the Taoiseach proved last week. I have no confidence that the Government will address the issue of escalating insurance costs, as it sees no benefit for it in so doing. The Joint Committee on Business, Enterprise and Innovation, of which I am a member, has for many years been examining issues related to the cost of doing business in Ireland. With Deputies Niall Collins and Tom Neville, I have invited representatives of the Alliance for Insurance Reform to come before the committee.

Insurance costs have repeatedly been cited by almost all commercial representative groups as a threat to the viability of businesses across Ireland. The Irish Small and Medium Enterprises Association, ISME, has described how insurance costs are not merely high but, rather, a threat to enterprises in sectors such as the hospitality, distribution and retail sectors. It has stated the solutions to the insurance cost problem are remarkably simple but politically challenging as they require the facing down of vested interests that view insurance reform as hostile to their livelihoods. The Small Firms Association, SFA, has stated small businesses are facing an insurance costs crisis, with 81% of SFA members having experienced a rise in premiums since last year. IBEC has stated the recent upward trend in annual premiums is proving to be unsustainable for low margin businesses, particularly those impacted on by Brexit. According to a survey conducted by the Irish Hotels Federation, over 80% of hoteliers have stated rising insurance costs are having a significant negative impact on their business.

Businesses will face huge challenges from Brexit in the coming years and simply cannot afford to have the additional problems and costs of insurance increases. We need real action now. A number of community groups have been affected. I have been contacted by groups that organise festivals that cannot do all the things they would have normally done due to their increased costs. One local community group in Limerick that had an insurance cost of €12,000 last year was given a quote of €50,000 this year. It was able to shop around and it got a premium of €40,000, which it struggled to pay. The money was paid out of its reserves so the group does not know how it will fund its insurance premium next year.

The Government's approach has been described as "death by a thousand consultations" and that is an accurate portrayal. Every time we raise this issue, we are referred to some new report, consultation, discussion or working group. We do not need any more of that; we need real and tangible action. The Minister will probably reply with the usual, unhelpful Government mantra - that the Government cannot do anything about insurance costs as such products are commercial in nature. That approach is of no use to anyone. Insurance policies are not the same as other commercial products. One cannot drive a motor vehicle legally in Ireland without buying an insurance policy. Private drivers and businesses with commercial vehicles are forced to pay whatever price an insurance company wants to charge with no avenue to challenge them. Due to the legal requirement imposed by the State in this particular area, the Government should - and indeed does - have a role and responsibility in this area.

I wish to speak briefly about the amendment we are tabling to the motion. Sinn Féin is proposing a very straightforward amendment to demand that a money message be provided to Deputy Pearse Doherty's Consumer Insurance Contracts Bill. The Bill would empower businesses against insurance companies by updating consumer contract law which is archaic. The Bill to which I refer is a part of what we need to be moving towards, namely, a new culture where the consumer is actually protected from the banks and other financial institutions. The Bill specifically deals with insurance contracts and implements a wide range of measures to rebalance the law in favour of the consumer. Laws designed for 18th century sailing merchants are overhauled and replaced with modern consumer-friendly laws. The archaic laws in force have resulted in a power imbalance where insurers hold all the cards. For example, an insurer could, under current law, refuse to pay out if a house burnt down because of an unrelated issue such as a burglar alarm not working. It also puts the onus on the insurer to ask for all the relevant information instead of leaving it to the customer to guess what information might be relevant. If the Sinn Féin Bill is passed, insurers would no longer be allowed to refuse payment due to technical issues or because a consumer did not know he or she was expected to volunteer information that was not sought.

This Bill is desperately needed to give the consumers a fighting chance. Insurers will also have to put their application forms and conditions in plain, intelligible language and, in any dispute, the consumer would be given the benefit of the doubt. As we know, the Government is using its power over money messages to frustrate the legislation coming from Opposition parties. The Bill was not opposed by the Government and it will be of great practical use to consumers and should not be delayed any longer. In conclusion, Sinn Féin is happy to support Fianna Fáil's motion, with the inclusion of a small amendment. We hope that Fianna Fáil can use its coalition deal with Fine Gael to force though real reforms in this area to help businesses.

See this speech in context