Dáil debates

Thursday, 25 March 2021

Civil Liability and Courts (Amendment) Bill 2021: Second Stage [Private Members]


5:55 pm

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein) | Oireachtas source

I thank Deputy Naughten and his group for tabling this Bill. As my colleague, Teachta Kenny, has outlined, we support this. However, we believe that it would benefit from discussion on Committee Stage so that we can all work together to improve it. One thing that we are all aware of in our constituency offices is the cost of insurance and its impact on our constituents. There are issues, especially with regard to the high price of insurance. That causes much distress. I hope that Deputy Naughten and the members of his group would be amenable to working with us on Committee Stage to ensure that, where this Bill can be strengthened, we all work together to ensure that we can do that.

Insurance is at the forefront of the mind of anyone who is old enough to have cause to pay for insurance, whether for their car, motorbike, business, house, boat or whatever else. The cost of insurance has rightly been defined as having reached something of a crisis point, especially vehicle and business insurance. While the issue has many layers and complexities, there are core issues which need to be addressed and can be done relatively simply. This is the second Bill about insurance which has come before the House in the past weeks. Like Teachta Pearse Doherty's Bill to ban dual pricing, this also targets a problem area, which is fraud. There is doubtless fraud related to insurance claims.

As an Teachta Kenny has pointed out, the level and extent to which people believe this happens depends on who one is talking to. Some believe it is rife; others believe there is only a small element of it. That is where this legislation would benefit from a full discussion on Committee Stage.

We know fraud exists. That is why the establishment of a stand-alone insurance fraud unit within An Garda Síochána to investigate insurance fraud, if and when it occurs, is long overdue. It is clear that various criminal activities in the insurance market are becoming more sophisticated. As a result, Garda operations must become more sophisticated and be better resourced. That is why Sin Féin is seeking the establishment of a stand-alone specialist Garda insurance fraud unit made up of detectives, Garda staff and financial investigators. This unit would be initially funded with the reserves built up by the Personal Injuries Assessment Board and supplemented with additional public resources, as required. It would created a hostile environment for organised criminality engaged in fraud, including ghost brokers, and ensure insurance companies comply with section 19 of the Criminal Justice Act 2011 by reporting all suspected fraud.

However, we must also pull the insurance industry up on its own behaviour. As insurance companies have begun to charge more for insurance premiums, they have run a simultaneous public disinformation campaign on the level of fraudulent claims to justify these extortionate premiums. Companies have repeatedly said that 20% of all claims are fraudulent and are causing premiums to rise. However, under questioning at the Joint Committee on Finance, Public Expenditure, and Taoiseach by an Teachta Pearse Doherty in 2019, it was revealed that companies only report a fraction of claims to the Garda as fraudulent. For example, Axa reported only 1% of claims to the Garda as fraudulent in 2018, not 20%. For Aviva, it was 4% and for Allianz, this figure was as little as 1%. Section 19 of the Criminal Justice Act 2011 makes clear that it is an offence for companies to fail to report known crimes such as fraud. Therefore, either the industry is exaggerating or there are persons involved who are in breach of the law.

According to Insurance Ireland's own figures, the number of motor insurance claims from 2014 to 2017 went down by 22%, amounting to 55,000 fewer claims. Despite this, the average motor insurance premium rose by 45% in the same period. This is also in the context of total personal injury awards being paid out through the courts and Personal Injuries Assessment Board falling by 15% from 2014 to 2018. It is crucial that Insurance Ireland speaks out on the fact insurance premiums have risen, despite the falling numbers and the falling cost of claims. It is important we challenge all of the issues in the area of insurance. Otherwise, we are letting the big players in the insurance industry off the hook completely.

As I said at the outset, this is a multifaceted issue. Indeed, we need to tackle the wrongdoing everywhere, from fraudsters, to companies using aggressive and anti-consumer pricing practices, customers facing artificially high prices, the industry overblowing levels of fraudulent claims, and criminal activities in the area such as the use of ghost brokers. It all must be challenged. People who commit fraud somehow think it is just the insurance company they are ripping off. It is not; it is all of us in the insurance pool.

As has been said here previously, this is not a victimless crime. This sort of carry on destabilises the insurance pool, because if fraud results in increased insurance premiums, it means some people will no longer be able to afford the premiums and they have to leave the market. As the numbers drop, the risk increases and therefore the price increases further. Across the board, we know rising premiums have caused havoc for small businesses, such as restaurants, pubs, hairdressers and childcare to name but a few. I know the live events sector is another area where insurance costs have put a lot of strain on events organisers and artists themselves. While we all know the importance of insurance cover, it must be accessible for those who work in the area and need it to work. There cannot be a continuation of the situation where insurance is an actual barrier to businesses operating or people being able to something as simple as drive.

To do this, we must tackle the causes of excessive premiums and do all we can to ensure these premiums are affordable and accessible. This legislation is an important part of that. As I have said, we will be supporting its passage, and we hope Deputy Naughten and the members of his group will work with us to strengthen it on Committee Stage.


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