Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputy for again raising this important matter of insurance. The Government is pursuing its action plan on insurance reform. The objective of that action plan is to make insurance more available for people and businesses and to reduce the cost of premiums charged to people and businesses for motor insurance, home insurance, public liability insurance, employers liability insurance and indeed all forms of insurance. A major part of the Government's action plan on insurance reform was to replace the old book of quantum with these new personal injury guidelines. I am glad the Judicial Council has now issued these new guidelines, which does result in a reduction in payouts that people will receive. The reductions will vary depending on how those are measured, but on average it will probably be something like 50%. That is significant.

This is of course only one part of a wider range of reforms and we have always said that there is no single reform which on its own will reduce insurance costs to the extent that we want them to. If one were to look at the pie chart of insurance costs, however, the biggest part of that would be the payouts paid to people who have been injured. Other things such as legal costs and the costs to the insurance companies in respect of their profits and reinsurance are all in and around 10%, whereas the payouts account for 40% to 50% of the cost of insurance. We therefore expect and anticipate that reducing payouts should result in a reduction in the cost of premiums for people.

It is important, however, that we are honest with people. The Deputy already knows, but he will not want to admit, that the new guidelines do not take effect immediately. They do not apply to claims which have already been assessed by the Personal Injuries Assessment Board, PIAB. The guidelines also do not apply to cases which are already before the courts. No Government can change the rules or guidelines retrospectively. We can only change them for new claims or at least for claims which have not yet been assessed. That is the plan. We must pass legislation to bring these new personal injury guidelines into force and we will do that as soon as possible. The Minister for Justice, Deputy McEntee, has approval to do that by legislation within weeks and I hope we will have the full co-operation of the Opposition in enacting it.

Even then, however, it will not apply to cases already before the courts or which have already been assessed by PIAB. The legislation will only apply to cases which have not yet been assessed. As a result, and there is no getting around this aspect, there will be a time lag between the present and the time when we will see premiums coming down. It is simply not honest to suggest that the reduction announced at the weekend can suddenly result in premiums being reduced next week. The changes have to become law first and that law cannot apply to claims which have already been assessed. That would be changing the law retrospectively, which as the Deputy knows is unconstitutional.

I do believe, however, that this development will result in the costs of premiums coming down, but there will be a time lag between now and when that happens. I anticipate and I will be looking out for renewals in the months to come and over the year to see whether costs have come down. We will be holding the insurance industry to account on that issue. I have met representatives of the insurance industry, as has the Minister of State, Deputy Fleming. We will be meeting them regularly. The Minister of State is going to meet the CEOs of the insurance companies individually and we will be impressing on them our expectation that as awards do start falling that premiums should fall as well. We are seeking individual commitments from each of the insurance companies that they will do that.

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