Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

On the cost of insurance, the Government believes it is vitally important that consumers and businesses can obtain insurance cover at a reasonable and fair price. The average cost of motor insurance has fallen consistently since the middle of 2016, with the most recent CSO data for November 2018 indicating that private motor insurance premiums have decreased by almost 23% since peaking two years previously in July 2016, while private motor insurance premiums have decreased by 7.6% in the past 12 months. This follows the establishment of the cost of insurance working group, which published a report on the cost of motor insurance in January 2017 containing 33 recommendations and 71 associated actions. A key conclusion of the cost of insurance working group was that there was no single policy or legislative silver bullet to address immediately across the board the problem of rapidly rising insurance premiums. The measures contained in the Personal Injuries Assessment Board (Amendment) (No. 2) Bill, along with the implementation of the recommendations in the report of the cost of insurance working group and the reports of the Personal Injuries Commission will contribute to a better-functioning personal injuries claims environment and should help to deliver reduced premiums for consumers and businesses.

Section 13 implements a recommendation of the Comptroller and Auditor General, who provides independent assurance that public funds and resources are used in accordance with the law, managed to good effect and properly accounted for and that they contribute to improvement in public administration. As Minister for Business, Enterprise and Innovation, I cannot ignore a recommendation of the Comptroller and Auditor General, who is a constitutional officer of the State, nominated and appointed by Dáil Éireann. I am confident that the wording of section 13 provides that the Minister will have regard to the operational, capital and contingency costs of PIAB when determining the sum to be retained and will ensure that PIAB will have sufficient funds to carry out its statutory functions.

There are other checks and balances in the system to ensure that PIAB will have sufficient funding to carry out its statutory functions, such as the oversight role of the Oireachtas Joint Committee on Business, Enterprise and Innovation, when the Minister is presenting on the Department's Estimates during the year and through the role of the board of PIAB. Section 13 inserts a new section, 74A, in the 2003 Act. The Comptroller and Auditor General recommended that the Department and PIAB agree an appropriate level of revenue reserves to be retained by PIAB and the basis for holding such a reserve. The Comptroller and Auditor General also recommended the introduction of appropriate legislation to address excess funds held by PIAB. Legal advice obtained by the Department and independently by PIAB is to the effect that legislative change is required to enable the board to remit excess moneys to the Exchequer. The board is anxious that the legislative change is made in order that moneys can be remitted to the Exchequer as soon as possible.

Section 13 provides for a reserves policy for PIAB, and that PIAB shall remit to the Minister for the benefit of the Exchequer any moneys in excess of those authorised to be retained by the Minister with the consent of the Minister for Public Expenditure and Reform. The Bill specifically provides that the Minister shall have regard to the operational, capital and contingency costs of PIAB when determining the sum to be retained. I assure the Deputy that PIAB will have sufficient funds to carry out its statutory functions. The amount to be retained will be agreed with PIAB, having regard to its operational, capital and contingency costs. We are all aware that PIAB fulfils an important role as it facilitates the objective assessment of damages at a much lower delivery cost and in a far shorter timeframe than through litigation. It is in all our interest, therefore, that it is properly resourced.

PIAB is self-funding by fees generated from claimants and respondents and it has sanction for a full complement of 80 staff. Its board, which is directly responsible for leading and directing PIAB's activities, approves the budget for PIAB each year. Detailed annual budgets are prepared and agreed internally by the executive management team of PIAB prior to being brought to the board for review, consideration and approval. The board has a duty to supervise the discharge of the delegative functions and in this regard it will ensure there is sufficient funding to do so. The PIAB financial accounts are audited by the Comptroller and Auditor General each year. When PIAB was established, it faced a number of legal cases challenging certain aspects of the legislation and the way in which PIAB operated. It was considered prudent that PIAB retain reserves to meet these challenges as the cost would be significant. The test cases and the numerous link cases were subsequently dismissed.

In 2011, PIAB refunded its establishment cost of €6.9 million to the Exchequer. Each year, PIAB decides on its budget, which has been in the region of €10 million to €11 million over the past number of years. As mentioned earlier, PIAB is self-funding. Its income budget is derived with the assistance of a forecast model which uses statistical regression analysis to project volumes. PIAB will continue to decide its budget.

The effect of the section is that the Minister for Business, Enterprise and Innovation, with the consent of the Minister for Public Expenditure and Reform, will agree with PIAB the appropriate level of reserves that PIAB can retain, taking into account its operational, capital and contingency costs. When a reserves policy is in place, it is intended that PIAB will retain in its bank account an agreed amount of reserves over and above the budget it needs for its operational day-to-day activities. PIAB is independent in the exercise of its statutory functions, and the Minister is not permitted in his or her executive function to interfere in any way with the day-to-day operations and functions of PIAB. Section 74 of the Personal Injuries Assessment Board Act 2003 provides a role for the Minister in the provision of funds to PIAB.

For the reasons I have outlined, namely, that section 13 implements a recommendation of the Comptroller and Auditor General, who is a constitutional officer of the State, I ask the Deputy to withdraw his opposition to the section.

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