Wednesday, 20 July 2016
Everybody inside and outside the House would agree that the scandal of motor insurance premiums in this country has to be addressed. The Minister will be aware that my party tabled a Private Members' motion on this some weeks ago. I have tabled this question in the context of the motion to keep the focus on the issue, to ensure there is meaningful action and progress towards achieving fair and reasonable motor insurance premiums for the public.
The Deputy tabled a question that is totally different from the one he has just asked. I will answer that in the supplementary reply. He asked for the timetable for the review of the book of quantum and that is the question I will answer now. The Personal Injuries Assessment Board, PIAB, is an independent statutory agency and, as Minister, I am not permitted in my executive function to interfere in any way with the day to day operations and functions of PIAB. Section 54(1)(b) of the Personal Injuries Assessment Board Act 2003 sets out the principal functions of the board: "to prepare and publish a document (which shall be known as the 'Book of Quantum') containing general guidelines as to the amounts that may be awarded or assessed in respect of specified types of injury".
The book of quantum was last produced in June 2004 and data was sourced by independent consultants on behalf of PIAB from a number of sources including the Courts Service, the insurance industry and the State Claims Agency. PIAB is reviewing the book of quantum and has engaged outside consultants to assist in this work and it is due to be published in the second half of 2016.
The book is not a recommendation for compensation levels but rather a reflection of the prevailing level of awards, compensation values awarded by the courts, settlements agreed by the insurance industry, settlements agreed by the State Claims Agency, and settlements agreed through the PIAB process.
I thank the Minister. I would have thought it was fairly obvious from my question on the book of quantum that it was linked to the very obvious issue of motor insurance premiums and the scandal of the rip off at the moment. I appreciate that PIAB is independent and I have met with it but as the Minister pointed out it has not updated the book since 2004. There are several problems with car insurance. Many claims are settled outside PIAB and the courts and the insurance company pay-outs are invisible. Implicit in the information we do have on the claims pay-outs are the injuries and the levels of awards that are visible. Unfortunately, the book of quantum seems to be very out of date.
What will the Minister do to address the spiralling insurance costs? Has she considered the model operating in the United Kingdom, care and not cash? This applies to minor injuries. The book of quantum will come up with a guide. It will not be definitive or be a blueprint but it will help I hope to force down premiums. Under the care not cash model, care such as rehabilitation and physiotherapy are awarded rather than a cash payment. Has the Minister, the Department or the Government considered that in reviewing the book of quantum and the spiralling costs?
In addressing the spiralling costs of motor insurance, the Department of Finance is undertaking a review of the policy in the insurance sector in consultation with the Central Bank and other Departments and agencies. The objective of the review is to recommend measures to improve the functioning and regulation of the insurance sector. The review will include an examination of the factors contributing to the cost of insurance. The Minister for Finance, Deputy Noonan, has established a task force in the Department to undertake the review. The first phase of that review, dealing with the framework for motor insurance compensation, has now been completed and I understand the Minister for Finance expects to publish the report in the coming weeks. The next phase of the review will focus on the factors contributing to the increasing cost of insurance. This phase of the review will be overseen by a working group chaired by Minister of State, Deputy Eoghan Murphy. The group holds its first meeting today and has scheduled further meetings for early September and the coming months. It is proposed that an interim report will be provided to the Minister for Finance by the end of 2016.