Matt Shanahan (Waterford, Independent) | Oireachtas source

The Bill speaks not just to fairness and transparency, but also to equitable justice and national competitiveness. It is an attempt to hold insurance companies to account, in the first instance, and associated intermediaries, in the second. The legislation calls for significant data available from the Central Bank to be provided in a clear format so we can assess the insurance reform measures proposed in recent months to see if they are having the desired effect in the market.

This House has been debating for some years the dysfunction in the insurance sector. This has been demonstrated recently, when the year-on-year rising claims market has been largely passed onto an unsuspecting public and business sector, with little or no rigorous examination by industry of the underlying cultures or environment driving insurance premiums in Ireland. The recent findings of the Judicial Council have been adopted by insurers and the Judiciary to operate a new soft tissue awards profile, which offers a 50% reduction in soft tissue claims compared to previous levels. It is worth noting that, at this award base, like-for-like injuries are still 30% less than UK peer insurance groupings. This situation becomes even more interesting when one considers the majority of insurance companies operating in Ireland are under UK incorporation, where one assumes they have been operating profitably, despite the lower claims environment there and the lower premiums they exact in a far more competitive market.

The Bill seeks to ensure the reduction in insurance premiums that is expected to result from reducing extravagant and bogus injury claims will be passed on to customers and should be immediately evidenced in 2021 by a reduction in premiums of at least 20% on the previous year. Despite significant talk of reform, the insurance market in Ireland is dominated by a small number of key players whose underwriting is largely confidential. Although much was made in the past 12 months of the cost of bogus injury claims by industry, there was next to no evidence of criminal proceedings being taken for false claims.

I say as a member of the Regional Group included in the claims environment that there must be a propensity for perjury. The Regional Group has advocated legislation begun by Pádraig Ó Céidigh and hopes to see the benefits, with criminal sanctions being pursued for perjury when it is evident in court. Even with this additional measure, without rigorous year-on-year analysis of the claims environment, legal costs and premiums resulting, we can have no expectations based on past performance that insurers will pass on the full benefits of savings or that such savings may not be consumed in further legal activity costs.

As part of the strategy to curb legal costs in personal injuries insurance claims, the work of the PIAB must be recognised and respected. This body allows people with soft tissue injuries to access legal services and adequate redress without the need to initiate significant legal challenges. The majority of claims for personal injuries of a low order can be dealt with in the District Court, where legal fees are capped at €3,500 and injury claims are capped at up to €15,000.

There has been some disquieting commentary recently on the possible attachment of post-traumatic stress disorder syndromes to future soft tissue personal injury claims. This would open a vista of actions proceeding to the Circuit or High Courts where awards and legal fees that can be expected are a multiple of those in the District Court. I endorse the right of somebody who has suffered a significant injury to claim sufficient and even exemplary damages when negligence is proven but it is known that we already demonstrate a high volume of litigation in comparison to European peers. This is a metric that must be reviewed year-on-year, along with the future analysis sought by this motion.

Insurance cover was always meant to offer a defence for injury and damage resulting from the unexpected. In recent years in Ireland, however, we have created the expectancy that every risk is unavoidable and every resulting injury the responsibility of anyone in the vicinity with adequate insurance cover to sustain a claim. Insurance cover has become a massive burden for many businesses and individuals and is doing enormous damage to our national competitiveness and the social fabric. Insurance fraud is theft, as is price gouging on vulnerable payers.

To the degree this can be analysed, I welcome what the Bill supports. Despite what the Government has put forward, I hope we will see scrutiny and analysis of Central Bank data over the coming months to tell us whether the reforms that have been recently adopted are having any effect on the market.

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