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

I welcome the opportunity to contribute to this Second Stage debate. I am pleased that this Bill has finally been introduced. Now that we have a chance to discuss it, its progress through the legislative process can commence in a meaningful way. It has to be acknowledged that over two years have passed since the review of the motor insurance compensation framework and over four years have passed since the collapse of Setanta Insurance. The Minister of State will confirm that along with other Deputies, I have pressed him on this issue consistently over recent years.

The consequences of the collapse of Setanta Insurance left many people in the lurch and in complete limbo. Claimants were and continue to be left short. Policyholders who took out valid insurance policies in this State from Setanta Insurance, which was principally regulated in Malta but regulated here for conduct of business purposes, faced the prospect of being held personally liable for any shortfall in claims made against their policies. People were getting letters from solicitors to advise them that judgments could be taken out against them in respect of any shortfall. Ultimately, such a judgment could be made against the mortgage on one's home. People were deeply fearful of what all of this might mean for them.

The nightmare is continuing for claimants. Over 1,500 active claims are associated with the collapse of Setanta Insurance. Not a single cent has yet been paid as compensation to approximately 750 claimants. A further 826 claimants have received the 65% limit set out under the insurance compensation fund. I welcome the fact that this Bill provides a statutory basis for dealing with this issue.

The Government committed in January that people caught up in the collapse of Setanta Insurance would have 100% of the cost of their claims met. That needs to happen. The Minister of State knows many stories of individuals, as do I. I got to know some of them quite well because they check in with me very often to learn the current state of play on the legislation. It is not an exaggeration to state some of them have had their lives on hold, in many cases for more than four years since the collapse of the company. In some cases, people have still not got anything seven or eight years after the accidents that led to their claims. This issue needs to be dealt with as a matter of priority.

With regard to the other central elements of the Bill, the Minister of State might elaborate, in wrapping up or later, on why a new insolvency compensation fund has to be established. Why is he not requiring the extra contributions to go into the insurance compensation fund, which was after all set up to deal with the failure of an insurance company. Why is there to be a separate fund under MIBI? If the Minister of State could address that issue, it would be very helpful.

While there is some good news in the pipeline for those caught up in the Setanta Insurance collapse, it does mean, in effect, another levy on policyholders. A 2% levy will be imposed in respect of non-life insurance policies. That is on top of the existing 2% levy paid into the insurance compensation fund and which is passed on directly to policyholders. It is also on top of the 3% stamp duty paid on non-life insurance policies and which has been paid since 1982. Therefore, there is stamp duty of 3%, a levy to the insurance compensation fund of 2% and a new levy going to the new insolvency fund of 2%. This amounts to 7%. Three percent is tax and the remaining 4% is in the form of a levy. I understand the insurance compensation fund is in deficit to the tune of more than €800 million and that the current amount collected from the existing 2% contribution to the fund is approximately €70 million per year. Therefore, it will be another 11 or 12 years before the legacy from the collapse of Quinn Insurance will be fully paid.

There is a real sting in the tail for consumers because we are all acutely aware of the challenges posed by the cost of insurance. This House has rightly deemed it to be a priority issue following on from the work of the cost of insurance working group, its recommendations and the work on employer and public liability insurance conducted in phase 2. As the Minister of State knows, the Oireachtas finance committee has dedicated considerable time and resources to focusing on the issue of insurance, particularly from a consumer perspective. That there is an extra levy needs to be put in context by the Minister of State. He should explain the overall numbers and the long-term plan. When the insurance compensation fund eventually washes its face, in a dozen years or so, will it be the Government's plan to build up more money in the fund, meaning that the 2% levy will remain in place indefinitely?

The new levy provided for in this Bill will reduce to zero eventually when a certain amount of money is collected in the fund. Consumers need to see light at the end of the tunnel when paying all these extra levies. It really is a moot point to state insurance companies do not have to pass on these levies to consumers. We all know that, in practice, they are passed on directly to policyholders in the form of an increased premium.

While there is oversight regarding the cost of motor insurance through the CSO data, there is no oversight regarding the cost of business insurance or insurance for sports clubs, community groups and voluntary bodies. We have plenty of anecdotal evidence of the really serious threat that is posed to so many businesses and voluntary, community and sports organisations, right down to the level of festival organisers, owing to the rising cost of insurance, especially public liability insurance. It seems that any activity or business that involves considerable public footfall faces increased premiums and, if not increased premiums, an increase in the excess in the policy or an increasing number of exclusions from the policy. That is a key issue.

We will continue to hold to account the Minister of State and the Government with respect to bringing about the necessary reforms needed right across the insurance industry, whether dealing with issues of data and transparency, getting the national claims information database in place quickly, benchmarking awards in Ireland against those in other jurisdictions through the working of the Personal Injuries Commission, or having a much more robust approach to dealing with fraudulent and exaggerated claims. We hope the Minister of State will get around, as a priority, to setting up the anti-fraud unit within An Garda Síochána in conjunction with his colleague the Minister for Justice and Equality with a view to focusing on insurance fraud. That is important also.

I would like the Minister of State, when concluding, to set out in practical terms when he expects this legislation to be enacted. He will have the co-operation and support of Fianna Fáil. We will engage constructively. We will bring forward amendments on Committee Stage but we want this legislation put into effect as quickly as possible. We are not going to reach Committee Stage this side of the recess but I hope and expect that this legislation will be regarded as a priority. As a member of the Select Committee on Finance, I will advocate that we prioritise this when we come back in the autumn so we can get to Report and Final Stages and have the Bill commence its journey through the Seanad.

In the Minister of State's concluding remarks, I would like him to state when he expects all the outstanding claims related to Setanta Insurance to be paid in full. That is information that people are waiting on. Could the Minister of State outline his intentions regarding the new levy, the proceeds of which will go into the insolvency fund? When can people expect that to be hitting their premium statements in the period ahead? How quickly after the enactment of this legislation does the Minister of State anticipate putting that into effect? That concludes my opening remarks. I look forward to engaging with the Minister and colleagues on this Bill in the autumn Committee Stage.

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