Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I propose to take Questions Nos. 97 and 100 together.

At the outset, I am sure the Deputies will appreciate that neither I nor the Central Bank can interfere in the provision or pricing of insurance products, nor do we have the power to direct insurance companies to provide cover to specific individuals at specific prices. Everybody knows it would be deemed gross interference in the market.

With regard to the impact that the withdrawal of the UK from the EU may have had on the general liability market in Ireland, I am informed by the Central Bank that when looking at all jurisdictions during the Brexit preparation period from 2018 to 2020, the number of firms writing general liability insurance in Ireland via a freedom of service or freedom of establishment basis had not decreased, and the overall premium levels written by them have remained static.

It is also my understanding from the Central Bank that while some UK and Gibraltar insurers decided to withdraw from the Irish market post Brexit, the vast majority – more than 95% - have implemented contingency measures. Some of that will come up in the course of the pre-legislative scrutiny process this afternoon, as there are some technical difficulties with some of the UK and Gibraltar companies as a result of their intention to continue to provide cover in the State.

While Brexit may have exacerbated insurance issues for certain sectors, I understand that a more prominent reason for the withdrawal of some international insurers from Ireland in recent years has been the instability in the personal injury claims environment. In this regard, I believe that the personal injuries guidelines are a key achievement of the action plan and should help to reduce this uncertainty. That will also have a knock-on effect on legal costs, as many of the claims will now be dealt with in the District Court rather than the Circuit Court, and claims previously dealt with in the High Court will now be dealt with in the Circuit Court because of the reduced level of awards. As a result, there will be a major knock-on effect on the cost of insurance. There is a commitment from all involved to provide a euro-for-euro reduction regarding the savings.

The general damages that were examined by the personal injuries guidelines deal specifically with the most common injuries - the slips, trips, sore backs and sore necks. They are the most common injuries that make up most of the claims. They did not cover serious or catastrophic injuries following a car accident or a very serious fall resulting in lifelong medical requirements. We only covered the most common injuries. The cost of care in the future for specific damages was not covered. We did not want to interfere with somebody who may end up in a wheelchair for the next ten or 20 years. Such cases were excluded from the personal injuries guidelines. Some of the claims that are being made will come under the new guidelines and others will not. We did not want any reduction in damages for more serious injuries and, in fact, some of them have increased marginally in recent times, which we all support.

The key issue we are going to have is to get people to use the PIAB process more closely. It was great when it started but people have tried to bypass it extensively in recent times. The only issue of concern that I have, and I want to put it on the record, is that while the awards through PIAB have come down, the chief executives of all of the insurance companies have, one by one, confirmed to me directly that they are using the guidelines to the letter of the law, and none of them are offering an extra grand over the figure to settle the case quickly. That is important.

The Government, the Alliance for Insurance Reform and the individual companies are determined that we will follow it through to the letter of the law. The only issue is that some people are rejecting the new awards because they are lower than they used to be, and some of them are going to work through the courts to test out the new guidelines. I hope the courts will stand over the guidelines that the Judiciary actually wrote and designed. When we get that certainty, it will be a major improvement.

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