Dáil debates

Tuesday, 1 June 2021

Judicial Council (Amendment) Bill 2021: Second Stage [Private Members]


6:25 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I move: "That the Bill be now read a Second Time."

I am sharing time with Deputies Conway-Walsh, Tully, Ó Laoghaire, Mitchell and Stanley. I am glad that I can introduce the Bill on Second Stage to the House. For far too long, Deputies will have heard me talk about how consumers have been ripped off by the insurance industry, which has put its customers at the bottom of the list in terms of priorities. Insurance is an essential part of a functioning economy. In many instances, it is a legal requirement. While consumers have no choice but to pay for insurance, the industry has a choice as to how it treats its consumers. For far too long, it has treated its consumers badly. That is the reality.

An investigation by the Competition and Consumer Protection Commission, CCPC, has found that some of the biggest players in the industry, AIG, Allianz, Axa, Aviva and FBD engaged in price-fixing cartel-like activity and behaviour for a 21-month period between 2015 and 2016. In doing so, they reduced competition and increased prices for their customers. Last December, the Central Bank confirmed that the industry was engaged in dual pricing, a price gouging activity that targets loyal and vulnerable customers and then hits them with artificially high premiums whenever they renew. Sinn Féin has drafted legislation that would ban this practice as the Financial Conduct Authority, FCA, in Britain has done. I ask the Government to end the delay it placed on that legislation so that the Dáil can end this discriminatory practice at the earliest opportunity.

When it comes to prices, the average motor insurance premium has risen by 35% over the past decade, despite the cost of claims reducing over the same period by 9%. Despite all of this, the insurance industry has received a listening ear in government to air its grievances and has regurgitated many of them which were false. This Dáil has responded to one such grievance and delivered for it. The Judicial Council Act was passed by the Dáil in 2019 and, ultimately, led to the personal injuries guidelines that came it into effect on 24 April this year. These new guidelines reduce the level of damages for personal injury awards from between 38% and 69%, but the average being 50% across the board, cutting the cost of claims for the insurance industry and guaranteeing it significant savings as a result. As the Ceann Comhairle and others will know, Sinn Féin supported these guidelines for one reason, that is, that they would reduce the cost of claims and, in doing so, reduce the cost of insurance for customers.

The insurance industry made a promise to pass on these savings to its customers in the form of reduced premiums. We were even told how much we could expect premiums to reduce. In 2019, the CEO of Zurich insurance told the finance committee the following with regard to a 50% drop in awards for soft tissue personal injuries: "It would be quite reasonable that if that were to happen and insurers had not reduced their prices, with all things being equal, by somewhere in the region of 10% to 15%, the committee should be asking a lot of questions." In regard to business insurance, he said that we should expect prices to fall by 20%. They are the figures of the CEO of Zurich. Maybe we should expect more. It was straight from the horse's mouth that these guidelines provided for these types of reductions. What we need now is an immediate and significant reduction in insurance premiums paid by customers, including motorists, businesses and homeowners. That is clearly not happening.

In a survey conducted by my party, we received more than 1,300 responses. Of those who had received a renewal quote since the new guidelines came into effect, 58% saw their premium increase despite having made no claims in the previous 12 months and only 22% saw a reduction in their premiums.

With the new guidelines in place, every customer who has not made a claim should have seen his or her premium fall. However, the Government's strategy has been to cross its fingers and hope the industry will do the right thing by cutting premiums in response to the guidelines. I say we can do much better than that.

We need a measure that will provide oversight and hold the industry to account. That is precisely what this legislation does. It requires insurance companies to provide information to the Central Bank each year for the next four years, including the amount paid by the company in personal injury claims and the amount it would have paid in such claims had the personal injury guidelines not come into effect. In addition, companies would have to inform the Central Bank of the average premium charged under policies covering third-party personal injuries and the average premium that would have been charged had the guidelines not been implemented. The Central Bank would then be required to submit a report outlining this information to the Minister for Finance on an annual basis, with a copy laid before both Houses of the Oireachtas.

Those reports will show everyone how much the insurance industry has saved as a result of the implementation of the personal injury guidelines and, crucially, whether it has passed on all of those savings, euro for euro, to its customers. If it has not, we will know about it and so will its customers. Not only will this hold the industry to account, it will apply pressure on it to cut premiums immediately and significantly. After reforms reduced whiplash awards in Britain, similar regulations to those contained in this Bill were introduced there, coming into effect in March last year. Some of the largest players in the Irish market, including RSA Insurance, Aviva Insurance, AXA, Zurich, Allianz and AIG, are also the largest players in Britain and are subject in that jurisdiction to requirements akin to those set out in this legislation. We should not accept any less oversight for customers in this State. This legislation will provide that oversight and there is no legitimate reason for the Government or any Member to reject or oppose it unless he or she is doing the bidding of the industry.

The Minister of State knows that what is proposed in this legislation is right and he will not vote against it. However, the Government has indicated its intention to propose that the Bill not pass to the next stage, which is pre-legislative scrutiny, for nine months. Why under God would the Government do that? All we are trying to do is make the insurance companies live up to their promise to reduce premiums for customers and ensure the same oversight that applies when they sell a policy in Newry, Belfast or Derry applies when they sell a policy in this State. I ask the Minister of State to drop the Government amendment and let the Bill go to pre-legislative scrutiny. If he does, I will give a commitment to work with him and his Department to ensure the legislation is robust and fit for purpose and, if needed, that it is amended on Committee Stage after we have had proper legislative scrutiny.

6:35 pm

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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I commend my colleague and party finance spokesperson, Deputy Doherty, on bringing forward this Bill. He has provided an opportunity to all Oireachtas Members, from all parties and none, to demonstrate to the people who have been crucified by high insurance costs that this House is prepared to stand for fairness. Insurance companies have hidden for years behind the book of quantum. They have continually and consistently used the high cost of personal injury claims as cover for charging eye-watering premiums for compulsory insurance. Since the personal injury guidelines took effect on 24 April this year, they no longer have that defence.

We know from experience that every possible tactic is used by the insurance industry to keep the raw data hidden from those who ask why Irish policyholders are forced to pay extortionate premiums. Indeed, the European Commission was sufficiently concerned about price-fixing and the cartel-like behaviours of motor insurance providers that it conducted unannounced inspections. When the CCPC conducted its own investigations, it found a lack of data on the market was serving as a barrier to new entrants. Price gouging and ripping off of people who are legally required to purchase insurance must stop. It is not enough just to stabilise the situation as it is. There must be a reversal of the crippling cost of insurance.

That is why this Bill is so important. Put simply, it will require insurance providers to provide relevant data to the Central Bank that will show whether savings from the implementation of the new guidelines are being passed on to policyholders. The substantial reduction in insurance costs must be the endgame. Otherwise, the guidelines are just a paper exercise to increase the profits of the insurance industry. We must stop dancing to the tune of the industry. The Government needs to tackle the exploitation of people who can least afford to hand over their hard-earned money but are left with no other option. Reductions in the cost of insurance claims must be passed on to customers.

This Bill will guarantee the outcome we need. It will apply pressure on the industry to pass on all the savings it makes, euro for euro, to its customers. We know the new guidelines reduce the level of personal injury awards by between 31% and 69%. Similar regulations came into effect in Britain, as Deputy Doherty indicated, following a reduction in the level of whiplash injury awards. Many of the same insurers that are active in the British market are operating here. Motorists, business owners and homeowners need us to make a stand for them and they need us to do it now.

Photo of Pauline TullyPauline Tully (Cavan-Monaghan, Sinn Fein)
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Commitments made by the insurance industry that a reduction in insurance awards would result in a reduction in insurance costs for consumers are not being met. In fact, many motorists, homeowners and business people are seeing their premiums increase. When members of the insurance industry appeared before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, their call for the implementation of personal injury guidelines was made with the commitment that a reduction in the volume of claims would result in a reduction in the price of premiums. With that in mind, the Oireachtas passed legislation to that end and the guidelines took legal effect on 24 April last, replacing the book of quantum in determining the level of awards in personal injury cases. The Judicial Council subsequently reduced the awards payable substantially in the light of the guidelines.

On the day the new guidelines came into force, the director of the Alliance for Insurance Reform was reported in The Irish Timesas saying he expected insurance premium charges to be "significantly reduced" from the following Monday. However, the insurance industry has put the brakes on many of the commitments it made in terms of reducing premium costs. We are not seeing much evidence of the industry passing on those savings. Premiums have not been reduced for motorists, homeowners and business people in line with the reduction in awards. It seems the insurance companies have simply pocketed the bulk of the savings arising from the reductions in awards, despite the commitments they gave.

Since the guidelines came into effect, we have seen a dramatic reduction in insurance awards, with the level decreasing in some cases by more than 50%. We need a way to verify that those reductions in awards are passed on to consumers in the form of lower insurance prices. The legislation introduced by my colleague, Deputy Doherty, will ensure that happens and will provided much-needed transparency on this issue. It will provide the Department of Finance with the ability to make regulations that require insurance companies to provide information to the Central Bank on how the new personal injury guidelines have impacted on premiums for policyholders. It will force the industry to pass the savings it makes on to its customers.

Similar regulations have come into effect in Britain, where many insurers in the Irish market also operate. The operations of those companies in Ireland should be subject to no less scrutiny. Consumers cannot afford to wait any longer. The Government cannot just sit back and hope insurance companies will do the right thing by reducing premiums. The industry needs to be held to account and this legislation will allow that to happen.

Photo of Donnchadh Ó LaoghaireDonnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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When we talk to people about the insurance industry and how it has conducted itself in recent years, they have many things to say. Comments that are made regularly to me are that it is a law onto itself, it is beyond reach, reproach and sanction, and it is unaccountable. Who pays the price for that? It is paid by the businesses struggling to find any kind of affordable insurance cover at a time they are under severe pressure. It is paid by the childcare facilities struggling to secure insurance, many of which are going out of business. The price is paid by businesses operating in very specific areas, such as soft play providers. It is paid by young people trying to get on the road and spread their wings, many of whom may need a car to get any kind of job or get to university. All of these people are being denied by what the insurance industry is doing.

This Bill seeks to make the industry accountable. Insurance companies made big commitments that if the costs of awards and damages came down, they would pass that saving on to their customers.

They said in 2019 that if awards decreased by 50%, they would reduce motor premiums by 15% and business insurance by 20%. These guidelines have been in place for more than a month but there is no evidence yet of this being passed on to the consumer. The Government's policy so far has been to cross its fingers and hope the insurance industry will do the right thing and reduce premiums. That is not good enough. The industry needs to be held to account to deliver on its promise. Businesses in Cork, including in my constituency, and everywhere else are under very severe financial pressure because of the pandemic. The least they deserve is not to be ripped off by insurance firms taking advantage. This Bill would force insurance companies to pass these savings on euro for euro to customers in the form of lower premiums. It would require the insurance industry to pass on information to the Central Bank outlining if and how it has passed on those savings. It is perfectly sensible legislation and I do not understand why the Minister of State is delaying this for nine months. It is a fiction. It is a way of avoiding supporting perfectly good Sinn Féin legislation that would help motorists, businesses and community organisations, and the Government should drop its amendment.

6:45 pm

Photo of Denise MitchellDenise Mitchell (Dublin Bay North, Sinn Fein)
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I welcome the opportunity to speak on this Bill. It will benefit so many people, and I thank my colleague, Deputy Pearse Doherty, for bringing it to the floor of the Dáil. The culture of insurance companies ripping off their customers is an issue with which we are all very familiar. This Bill seeks to change that culture and pass on the savings to customers because it is the right thing to do. Insurance companies have used rising claims to justify price hikes over recent years, but not passing the savings on to customers is unfair and unjust. It is the insurance industry moving the goalposts to protect its profits. The sector is speaking out of both sides of its mouth. Its only motivation seems to be crazy profits off the backs of people who cannot afford to pay what they are paying. The Bill seeks to make things better for drivers, businesses and homeowners who are being ripped off. Young people are being priced off the road. Childcare facilities are getting quoted out of existence or being refused insurance completely. The average working person is getting robbed by these companies, and this Bill in some way will change that. It is about fairness and protecting the consumer. It is time the industry was held to account and was transparent with the people. The Minister of State has to act. Kicking the can down the road is not in the interest of anybody except insurance companies.

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I also welcome the opportunity to speak on this Bill. Insurance companies have ripped off the public for too long. The insurance sector made profits of €142 million last year, yet premium prices kept increasing. This Sinn Féin legislation would force insurance companies to pass on savings to their customers and reduce premium prices as a result of new personal injury guidelines. A recent survey by Sinn Féin found that 58% of respondents had seen their premiums increase. This is despite the new guidelines. Our legislation forces the industry to outline to the Central Bank how it has passed on the savings to the public. Similar legislation has been enacted in Britain and governs the practices of all relevant companies there such AIG, AXA, Aviva, Alliance and RSA, all of which operate in this country.

Dual pricing is another issue on which Deputy Doherty has done a lot of work. The practice was banned by the FCA last Friday yet continues here in Ireland. The British ruling affects both home and motor insurance. Dual pricing involves the overcharging of loyal customers on renewal premiums and can drive up prices by in the region of 35%. The Central Bank has recently investigated this practice in Ireland thanks to complaints submitted by Deputy Doherty and Sinn Féin and it found that the practice was widespread. It meant that "those customers with the longest tenure" were "paying the most".

We need to see action on both these fronts. We need action now to outlaw these practices. The ball is firmly in the Government's court, and any thoughts of delaying this are outrageous. There has been too much delay and there should be no more delays. It is time to act.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 1:

To delete all words after “That” and substitute the following: “Dáil Éireann resolves that the Judicial Council (Amendment) Bill 2021 be deemed to be read a second time this day nine months, to allow for further consideration and analysis of how the Bill interacts with existing insurance data already collected by the Central Bank within the National Claims Information Database (NCID); and for such considerations to be taken into account in further scrutiny of the Bill.”.

This is the second Bill introduced by Deputy Doherty this year relating to insurance. In February, we had a fruitful debate on differential pricing, and I hope that this evening we can have an equally informative discussion. While there is no dispute that these two Bills attempt to address important issues, the Deputy must recognise that these two themes are part of this Government's whole-of-government approach under the action plan for insurance reform, which we launched last December.

There has been considerable progress in delivering on these actions outlined in our action plan. A key achievement was the implementation of the new personal injuries guidelines in April. This was delivered seven months ahead of schedule, a timeframe we felt was reasonable. We are pleased that we are now seven months ahead of schedule and having this debate now because the Government passed the public injuries guidelines in this House some time ago. We are having this debate at this very early stage in the life of the Government as a result of our speedy action in dealing with a variety of matters under the action plan for insurance reform. These guidelines significantly reduce the award levels in a number of areas and will be used by both the Personal Injuries Assessment Board, PIAB, and the Judiciary. Objectively, these guidelines should bring about reduced costs to customers, not anything contained in the Bill before the House. I stress that it is important for all sides of the House to recognise this fundamental point. The judicial guidelines will bring about the reductions. There is nothing whatever in this legislation - not a scintilla of a sentence or a syllable - to bring about reductions in the cost of insurance. The Bill refers to the production of a report. Based on what the Deputies have said so far, the publication of a report will not shame the insurance companies into reducing premiums. The sole purpose of the Bill is to produce a report insofar as it might shame the industry into doing something, which Deputies have discounted on several occasions this afternoon.

Both the Minister, Deputy Donohoe, and I have been engaging directly with insurers to hold them to account in respect of commitments they have made to reflect savings arising from reduced award levels. This will continue over the course of the year to ensure a pass-through of the new guidelines continues to take effect, benefiting policyholders. I welcome that some of the firms have indicated to Oireachtas Members initial reductions on premium renewal as the new guidelines begin to take effect.

As for the Bill, the Government shares its objectives to increase transparency on insurance companies reducing premiums as a result of the personal injuries guidelines. At the heart of this debate is better understanding all the different costs that make up the price of premiums. It is important that these costs are not singled out as the silver bullet in solving all the problems in the sector but examined in their overall contribution to premium pricing. Ireland has a sophisticated transparency system in place to monitor insurance pricing and I welcome suggestions to improve it. My officials in the Department of Finance are actively exploring ways to do this and they will be taken into consideration along with the principles in this Bill when we bring forward legislation on the insurance sector in the autumn.

Regarding transparency, first, I wish to highlight that the Central Bank produces a national claims information database, which has been referred to, the equivalent of which is not available in most other EU countries. Second, it will produce its first ever report in this area on employer and public liability in June or July this year, which will be a major help to us in legislating. In addition, during July it will produce its review on differential pricing. We want to see the outcome of that review so we can incorporate what is necessary in the legislation we will bring forward in the autumn.

Third, the third annual report on motor insurance premiums will be produced in September. The Central Statistics Office, CSO, produces figures on insurance prices on a quarterly basis and the Personal Injuries Assessment Board, PIAB, produces regular public reports. The likes of that organisation do not exist anywhere else. There is no PIAB in the UK producing public and transparent information on an annual basis. In addition, chief executives of several major insurance companies have appeared before the Oireachtas committee in recent weeks, which highlights the level of public scrutiny of this matter. In September, the Consumer Insurance Contracts Act 2019 will ensure that all insurance companies sending out renewals for motor insurance must give the five-year history of their insurance premiums. The level of transparency in Ireland is unparalleled in the EU and our neighbouring jurisdiction.

The Bill is concerned with oversight, with which we agree. That is what we will be doing as part of our legislation. I will not dwell on particular aspects of the Bill except to say that we will take on board in a positive manner the principles behind it when we are drafting legislation as part of the action plan for insurance.

Something else that will lead to cost reductions is combating the number of uninsured drivers on the road, which add at least €30 to every policy. Recently, we concluded public consultation on PIAB. Its like does not exist in any neighbouring country. We hope to have legislation on the reform of PIAB in the autumn. Recently, the Department of Justice completed a review of the Occupiers' Liability Act, including the duty of care and notices and waivers, in order to increase protections for consumers, businesses, sporting clubs and community groups. I understand that work is continuing on a formal proposal to the Government on proposed legislative changes in that regard. The Criminal Justice (Perjury and Related Offences) Bill 2018 recently passed all Stages in the Dáil and I hope that it will be passed by the Seanad shortly.

I have listed five or six elements that will contribute to a reduction in the cost of premiums. Passing legislation to isolate one element only while ignoring the other factors seems to demonstrate a limited understanding of the dynamics underpinning the cost of insurance. If the judicial guidelines were all that we were reliant on to reduce premiums, I could understand why we would consider this Bill. However, I have given one example of the myriad actions being taken by the Government. To isolate one element and ignore others that will also contribute to cost reductions does not reflect what is happening.

The approach the Bill uses to seek to hold insurers to account seems inadequate, as we already have a unique resource in this country, that being, the Central Bank's national claims information database, which provides a level of information that is not available in many other areas. We must wait for the three reports that will come from the Central Bank, not next year or this autumn, but this summer, so that a good and broad-based discussion on insurance can be enabled when we return in the autumn. Everyone would agree with that instead of believing that there is only one show in town and one silver bullet. We have many strings to our bow when it comes to dealing with this issue.

There is a perception that the Bill simply reflects recent legislation passed in the UK, as mentioned this evening, and that, given that many insurers operate in both markets, providing the information in Ireland should not be an issue for them. However, the Bill goes much further than the UK requirements. It appears to be a much more cumbersome exercise than in the UK and ignores the fact that we already have a superior capacity to monitor claims costs and pricing trends through the national claims information database. We have a level of transparency that does not exist in other countries.

The forthcoming reports will feed into the work that is under way in the Department on considering a number of potential legislative measures relating to consumer matters, including the two Bills that the Deputy introduced in recent times. That said, we should not lose sight of the fact that the Government has developed a comprehensive whole-of-government action plan for insurance reform that addresses insurance issues in a structured and targeted manner and that we are already holding the insurance industry to account in terms of passing on savings arising from the reforms delivered to date.

I commend the amendment to the House.

6:55 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I understand that Deputy Kerrane is sharing time with her colleagues, Deputies Clarke, Mythen and Paul Donnelly.

Photo of Claire KerraneClaire Kerrane (Roscommon-Galway, Sinn Fein)
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I welcome the opportunity to speak on this important legislation. I listened to the Minister of State. Despite, as he puts it, holding the insurance companies to account, nothing that has been done by the Government has reduced premiums. Premiums are still increasing. That is the problem. It is a great shame that we must constantly force the insurance companies to do the right thing when it comes to costs for customers. Worse, the Government fails to act on behalf of those customers the length and breadth of the State. Why has the Government not stepped in to ensure that the savings made by insurance companies through the reduction of up to 50% in awards are passed on to customers? That is the reason we have had to step in with this legislation.

For years, insurance companies have been ripping off customers with rising premiums, making it more difficult for young people to get on the road, especially in rural areas. On turning 18 years of age last year, my brother received quotes of more than €3,000. That was on top of tax of €700 or €800 and the cost of running a car. Unless a person has money, it is impossible to get on the road, particularly in rural areas where public transport is either non-existent or inconvenient. Insurance companies have been lining their pockets and will do so even more now that they are saving money on awards while increasing premiums for no other reason than they can. This legislation will put a halt to that.

I heard what the Minister of State said about this Bill tackling just one element, but at least it would reduce premiums, which is not happening right now, and that is the problem. The Bill will ensure that savings to the insurance companies are passed on to customers. It will give young people a chance to get on the road and allow them to get from A to B, be that to a job or college. It will help workers and families that are constantly seeing their costs increase, for example, rent, childcare fees and household bills. It will give them a break and a little bit of fairness in terms of the cost of living.

Photo of Sorca ClarkeSorca Clarke (Longford-Westmeath, Sinn Fein)
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Looking at the Government's proposal to read the Bill again in nine months' time, I cannot decide whether the Government is trying for "kick the can" champion or is planning on passing off Deputy Doherty's homework as its own. The Minister of State believes that an industry whose practices have been exposed time and again by my colleague, Deputy Doherty, and which has been found to reward loyal customers by price gouging at the time of renewal, will voluntarily disclose the savings being made and pass them on. No one is that naive. The behaviour and practices of the insurance industry make the introduction of legislation now necessary. The time for good faith has passed. This legislation will hold the insurance industry to account, requiring it to demonstrate if and how it has passed on savings to customers. That requirement is applied to the same companies in the UK, where they are more than happy to comply.

I have countless constituents and businesses that rely entirely on insurance to earn a living. Thanks to the decades-long failure of policy and non-existent public transport in Longford-Westmeath, having a car is essential if one needs to get to work or college. Businesses are being priced out of existence. The Minister of State should come to Kilbeggan. I will introduce him to businesses that are no longer operating because of the cost of insurance.

The dogs on the street know that people are being taken advantage of. As one constituent put it to me, this was happening while the Government was doing less than nothing. Do not insult people's intelligence and expect them to believe that an industry that has taken advantage of them time and again, year in and year out, will step up and do the right thing.

I do not believe that the Minister of State believes that himself so I ask him not to try to sell it here in this House or to the hard-working people who are being priced out of existence because of insurance premiums.

7:05 pm

Photo of Johnny MythenJohnny Mythen (Wexford, Sinn Fein)
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I thank Deputy Doherty for bringing this Bill forward. It is a culmination of intense research based on the principles of transparency, fairness and accountability. At the heart of this Bill is the protection of working people and their families. Any owner of a vehicle will say that their premiums over the last few years have increased, year in and year out, especially for young drivers who have been subject to extortionate quotes, where these quotes often exceed the value of the vehicle itself. This Bill gives this House the chance to correct and rein in this practice of gross profiteering and legally requires the insurance industry to supply information to the Central Bank to show categorically how claims have been reduced as a result of the new personal injury guidelines and, more importantly, how these savings will be reflected in premiums over the next four years and will be passed on directly to the customer.

We all know, as sure as night follows day, that if insurance companies are left to their own self-regulation, the full savings created by the new personal injury guidelines will not be passed on to the customers or the full empirical numbers for claims will not be made public.

In 2020, the Central Bank found that the average insurance premium increased by 35% in the last decade and that 2.5 million policyholders were overcharged by €187 million in a single year. This Judicial Council (Amendment) Bill is, therefore, so important because it legally requires the insurance industry to provide information to the Central Bank on the reduction of claims due to the new personal injury guidelines.

It also states that the Central Bank is legally bound to pass on that information to the Minister for Finance specifically stating that a report be brought before the Irish Parliament on an annual basis. This part is crucial as it will deliver a more robust, measurable, transparent and accountable insurance industry that will benefit motorists, businesses and homeowners alike.

The Bill should be supported from across all sides of this House because it gives homeowners, businesses and motorists a fair deal for their hard-earned cash and will prevent any further gouging or dual-pricing, which will continue if we rely on the insurance industry to self-regulate. I thank my colleague Deputy Doherty for the extensive work he has done on this Bill. It is a pity that the Government has again capitulated to the insurance industry and conceded to the delaying of this good legislation for another nine months in its latest amendment.

Photo of Paul DonnellyPaul Donnelly (Dublin West, Sinn Fein)
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The citizens of Ireland must be living in a different place from this Government. The young people of Ireland are definitely living in a different place because what the Minister of State explained in his statement to us bears no resemblance to what is happening on the ground. We have to end the insurance rip-off and reduce premiums for consumers.

The personal injuries guidelines which have been in place for over a month have significantly reduced the cost of claims for insurance companies. The insurance companies, however, are clearly not keeping their promise to reduce the costs of insurance. As stated earlier, the survey launched by Sinn Féin’s spokesperson, Deputy Doherty, found that 58% of respondents who received their renewals since the new guidelines came into effect actually saw their premiums increase and only 22% saw them fall.

The insurance industry promised to reduce premiums for motorists and businesses significantly as a result of these guidelines. It is disgraceful that on the evidence so far these savings are not being passed on to their customers. This must happen. These insurance companies will do what one inspects and not what one expects. The days of wanting insurance companies to do the right thing are over. The Judicial Council (Amendment) Bill, as proposed by Deputy Doherty, will require the insurance industry to provide information to the Central Bank for each of the next four years outlining how the cost of claims has fallen as a result of the new personal injuries guidelines and if and how they passed these savings on to their consumers in the form of reduced prices. The legislation requires the Central Bank to report this information to the Minister for Finance with the report brought before each House of the Oireachtas annually. The insurance industry must be held to account and we must ensure that every cent that should be passed on is passed on to the young people who are being forced to pay thousands of euros every year in insurance costs. They are the people who are being ripped off, together with businesses. The insurance companies are the ones which are making mega-profits and this has to end.

It is important and it was noted earlier on that similar regulations are already in effect in Britain. These are not unique or unknown to the industry. I commend this Bill to the House.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I am pleased to support this Bill. I will support any legislation or intervention from any Member of this House regardless of their political colour if it means that insurance premiums will be reduced for hard-pressed consumers in this country. We cannot wait another nine months for this issue to be addressed. I believe in the Minister of State's intentions. He is well intentioned in the approach he wishes to take with the insurance industry. Ultimately, that has to deliver, but we cannot waste any more time. We have to take any interventions that are made in this House seriously. We must try to take a consensual and unified approach to dealing with this very significant issue for Irish consumers, jobs and business.

For years insurance companies promised us that we would see a reduction in premiums if court payment awards went down. While it might be early days, there is little evidence to suggest that premiums have gone down since the Judicial Council guidelines came in. In fact, there is evidence that I have come across in my own day-to-day work where some companies are just shifting the goalposts and introducing new criteria and thresholds to keep their profits up. This is the kind of activity that the Minister of State needs to keep a very close eye on, as do the Central Bank and the Competition and Consumer Protection Commission.

All of this comes on the back of insurance firms, particularly those in the motor insurance market, refusing to grant rebates to their customers like they did at the start of the pandemic, despite the significant reduction in road usage and, as a consequence, claims in the early part of this year. This foot-dragging on premium reductions and rebates is simply unacceptable, but our experience of the insurance industry in this country means we should not be surprised. This is an industry with form. We all know that excessive awards were a problem to which the State responded but this was only part of a much larger problem. The reality, as was stated earlier and as we have been told by the Competition and Consumer Protection Commission, is that motor insurance premiums increased by up to 35% between 2009 and 2019 while claims costs per policy fell 9% in the same period.

At the same time the operating profits of these price-gouging firms have continued to rise, for example, by 10% in 2019, while premiums have fallen by only an average of 4%. To add insult to injury, insurance companies are effectively pocketing State supports to businesses that the Minister of State and I, as taxpayers, are paying for. I refer to supports that all of us in this House legislated for. These companies are like the archetypal Second World War spivs, but in more expensive suits, who are trading off people’s misfortune and exploiting a crisis to line their own pockets.

At last week's meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, my Labour Party colleague, Senator Sherlock, challenged the FBD, Aviva and Zurich insurance companies on this extraordinary situation, which is happening in plain sight. I have raised this with the Minister of State before, as have others, but it goes on.

Insurance companies are obliged by law to reimburse the State in any personal injuries awards in respect of any welfare payments that may have been made to the injured party. Despite the Minister of State's bellicose words on the airwaves, they get to make up their own rules when it comes to the treatment of business interruption insurance.

Only last week, we saw the State’s biggest general insurance provider, AXA, stating it intends to deduct the value of pandemic State supports from payouts to businesses. They really have some neck and they need to be taken on.

The Minister of State has rightly said it is not the job of the Government to subsidise the profits of the insurance companies, but he has a responsibility to call a halt to this travesty.

The issue of insurance cover for businesses is a ticking time bomb as we move to the recovery phase of our economic development, we hope, post Covid. In recent weeks, I have witnessed more and more insurance companies simply refusing to provide cover to businesses and, in some cases, even to firms that have never claimed. They have no history of claims or of issues whatsoever. Last week, Engineers Ireland spelled out in stark terms how the housing crisis could deepen because fire experts cannot get the proper insurance to allow them to sign off on individual houses, flats, nursing homes and entire housing estates.

I am dealing with a shocking case in County Louth. I will not identify the individuals involved but I mention this because it is illustrative of a wider problem. A firm that employs almost ten people in the outdoors sector has, in effect, been closed because it cannot get standard insurance cover. It is cover the firm has had since it opened, without a single claim having been made in the history of its operation. The jobs are at risk of going. This is an entrepreneur who has made it through the pandemic, only to be shown the door by an insurance company. Two issues have been cited, one of which is Brexit and the fact that there are difficulties with the underwriters, which are UK licensed and finding it difficult to operate in the EU. The second issue is the nature of the firm's business. I reiterate it has had no claims made against it and it operates to the highest safety standards, as its record shows.

If not tackled, this issue will stymie our recovery and put hundreds, if not thousands, of good businesses and good jobs at risk and out of operation. Today, the Government launched its national economic recovery plan. Many of the initiatives outlined therein are simply rehashed initiatives that have been lodged in any case since the Government came into office, although it would be churlish of me not to recognise that there are some positive initiatives in the document, notwithstanding the criticisms I have of some elements of it. Nevertheless, there is one step that would greatly enhance the prospects of businesses' viability, namely, tackling all these deep-seated inequities and injustices in the insurance sector and the way in which businesses are treated.

The shocking case that I outlined I am dealing with is illustrative of a wider problem. We have a fundamental market failure in insurance in this country and it is holding back our economic development and our society. Where there is market failure, an activist State ought to step in. We recently proposed the introduction of innovative pooled insurance schemes, the norm in other EU countries, which would allow community services such as childcare centres, co-operatives and sports clubs to group together under one policy to secure significantly cheaper premium and to spread and share the risk. That is normal elsewhere, but we do not seem to be able to do it in this country. We have also called on local authorities and education and training boards, for example, to use their ownership of Irish Public Bodies Mutual Insurance to extend cover to community events and festivals, which will be absolutely necessary if we are to help our vibrant arts and entertainment sector bounce back from the pandemic.

The State must step in actively to reshape the insurance market in the interest of customers, communities and local businesses. In the meantime, we are happy to support this initiative, designed as it is to force down premiums. We will support any initiative, regardless of where in the House it might come from, that is designed to achieve what we all want, namely, reduce premiums and costs for businesses, save jobs and give consumers a fair crack.

7:15 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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The lack of affordability of insurance in this country has been a hot topic for many years and the source of much annoyance and anger for consumers. High insurance premiums add significantly to the cost base of our economy. As premiums go up and up, this plays directly into the increase in the cost of living. Affordable insurance, therefore, is fundamental to the long-term interests of our society and communities, not least in regard to protecting and creating jobs.

One does not have to look far to see how astronomical premiums have impacted on communities and individuals. As premiums increase, small businesses can be pushed out of the market by the crippling overheads they face, including in particular the cost of insurance. Let us not forget the major crisis that befell our childcare sector at the end of 2019, when hundreds of crèches faced closure due to the lack of affordability of insurance.

Before Covid-19 changed the landscape for summer festivals, they were already under threat from rocketing insurance premiums. One such festival that came forward about increasing costs was the Ballina Salmon Festival, whose premium increased from €6,500 in 2016 to €25,000 in 2019. The festival, which had been running for 65 years, finally had to shut because it had become completely unaffordable to take out insurance. When premiums are sky high, local services are forced to close their doors, businesses can fail, jobs can be lost and community groups can no longer afford to put on events. This has a considerable impact, not only on the economy but also on our community, yet despite the often devastating impact of high premiums, costs continue to rise. We know this. It is not news to anyone in the Chamber and it is long past time the Government sorted this out.

Why does Ireland face such high insurance costs? There have been many attempts to explain this away. Today we are debating the claim that awards are too high, which insurance companies maintain leads to spiralling premiums. I am not saying that high awards do not contribute significantly to high premiums - there is a certain logic and evidence behind that - but what we saw over recent years was a very successful portrayal by insurance companies of these high awards being a primary contributor to the cost of premiums. This argument has passed the buck, so to speak, onto judges and their legal system and, in doing so, effectively absolved the industry of responsibility.

The insurance industry heavily lobbied for new personal injury guidelines to replace the book of quantum. Its efforts were successful and these new guidelines took effect on 24 April. In its lobbying efforts, the industry was adamant that these guidelines would lead directly to a fall in insurance costs, and in some cases, a drop of up to 20%. It is worth noting that a number of judges, including the former President of the High Court, Mr. Justice Peter Kelly, have on record expressed scepticism as to whether lower awards would result in lower premiums. Serious doubts have been raised among the Judiciary about any benefit to policyholders, while the Law Society of Ireland has stated that the guidelines "swing the pendulum too far" in favour of insurers. The industry maintained that these new guidelines were necessary. Now that they have come into effect, policyholders need to see a return in the form of lower premiums - end of story.

The Bill aims to hold insurance companies to account for those promises by requiring them to report to the Central Bank in respect of how the guidelines have affected the cost of insurance.

The Social Democrats will be supporting this Bill. It is not a silver bullet for the many issues within the insurance industry, nor does it claim to be. However, it seeks to hold companies to account for their promises to lower premiums, if payouts are reduced. For that, we welcome this Bill. Oversight is desperately needed and this Bill aims to provide that.

Reform of the insurance sector is long overdue. While the Central Bank has begun to produce statistics and investigate the basis on which insurers have been increasing premiums, we cannot be satisfied it is sufficiently consumer-focused in its approach. It does not collect enough basic data, especially on premiums, and is not active enough in terms of vulnerable customers or market concentration and volatility.

How can we pinpoint the root of Ireland's high insurance premiums without sufficient data to understand the entire picture? We have heard a plethora of theories about high awards, fraud and exaggerated claims, but without the data we cannot address the areas which need reform and legislation. Where are the facts? Where is the evidence to support the industry's claim that high awards are principally to blame?

Ireland is often blamed for having a claims culture. This is what the insurance companies have told us to gain support for the personal injuries guidelines. Let us look at the numbers. There was a big rise in personal injuries awards between 2007 and 2016. They nearly tripled. However, since 2016, the number and value of awards processed by PIAB has fallen year on year. There has been a decrease of 11% in the number of awards and of 18% in the value of awards since 2016.

Let us look at one insurance category. In 2019, motor insurance accounted for 70% of personal injury assessments. From 2009 to 2019, motor insurance premiums rose by 35%, according to the Central Bank's annual private motor insurance report. It is a staggering figure. What if we look at liability across categories of insurance? Looking across motor, employer and public liability insurance categories, data from PIAB again show a decrease in each category, in the average value of awards, from 2018 to 2019.

There is little proof that high premiums can be directly attributed to high awards. We need more data to understand what is driving these skyrocketing insurance costs. My party has been asking, for some time, for a new consumer affairs committee to be established within the Oireachtas, with its sole focus to be outcomes for consumers across the board. Regulators should expect to have to answer far more regularly for their actions or, in many cases, their inactions. A committee could play a valuable role in bringing about accountability, as well as highlighting where there are gaps in the legislation or deficiencies in the powers available to regulators.

The bottom line is that insurance premiums are crippling for consumers, small businesses and community groups. The cost of insurance is a huge overhead for businesses and these exorbitant costs are passed on to consumers. Ireland was recently ranked sixth, in terms of the high cost of living, in Europe and 12th in the world this year. Our high cost of insurance directly contributes to the high cost of living for individuals and families. It directly impacts the quality of local communities, shuttering businesses and local services and forcing community groups to cancel events because they cannot pay the spiralling cost of insurance premiums.

Today's Bill will not fix all insurance issues but it makes a serious effort to hold the industry to account for its promises. I warmly welcome it for that reason. I commend Deputy Doherty on bringing this Bill forward and on his tenaciousness in pursuing the significant problems in the insurance industry, which the Government should have solved long ago.

7:25 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is Deputy Murphy sharing time?

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I am sharing time with Deputy Matt Shanahan, who is probably on his way. I thank Sinn Féin for bringing forward the Bill. I commend Deputy Doherty on all of the work he has done, over many years, in highlighting issues in our insurance industry. He has brought to light many important issues and has been relentless in his efforts to try to deal with them.

This Bill would require insurance companies to provide information to the Central Bank for each of the next four years, outlining how the cost of claims have fallen as a result of the new personal injury guidelines. I support this idea. It is one way of helping us to understand how effective the personal injury guidelines have been. Too often, the impact of policy is not analysed enough. Guidelines or rules are often just introduced and it is assumed that they will achieve the intended results.

It is important that when changes to anything are introduced, we have mechanisms in place to help us to judge whether the changes have been effective. It may also help guide us towards any future amendments which need to be made or any additions which need to be made to the personal injury guidelines.

It will also serve the purpose of monitoring companies and prices to see if and how they have passed these savings onto their consumers, in the form of reduced prices. In my previous role as president of the Irish Road Haulage Association, IRHA, we found trying to tackle the insurance issue was like banging your head off a brick wall, because the competition authority was reluctant to tackle the issue. It wanted masses of evidence before it would consider taking action, yet no such evidence was available because the insurance companies were not required to publish it.

Another aspect of insurance reform that needs to be addressed as a matter of urgency is the issue of test cases. The UK financial regulator takes test cases to court on behalf of a certain sector and the result of that case becomes the precedent or benchmark for all other similar cases. However, in Ireland, each individual has to pay €5,000 to take his or her claim to the commercial court. This is unacceptable. It makes it more difficult for businesses or individuals to legally challenge insurance companies. Many publicans are in this position. We need to update the role of our Financial Regulator to have it take test cases in a similar way to the UK. After all, the Financial Regulator is there to serve the public. Many small enterprises or individuals do not have the financial resources to take an insurance company to court and this will be even more problematic, since many business have been closed for the past 14 months.

As this Bill relates to insurance, it is important to note that thousands of people are unable to get on the road due to delays in our driver testing. We hope motorists will have cheaper motor insurance costs, but we also need to ensure that people can get on the road. The Road Safety Authority, RSA, and the National Driver Licence Service, NDLS, have been lax in bringing back theory tests, driving lessons and driving tests. All of the inaction serves to undermine any savings which could be garnered from insurance reform, as well as preventing those out of work from availing of job prospects, particularly in rural Ireland.

I have constantly called on the RSA to bring in an online portal for the theory test. When it did bring it in, it only suited one quarter of the computer users because of the chosen software. When one tries to apply, one discovers there is no test available until 2023. If these new personal injury guidelines result in people being charged less for insurance, that is great news, but it is not that useful to someone who cannot get themselves up and running because of delays in other areas. While that is a tangent from the contents of this Bill, it illustrates the lack of joined-up thinking in the system.

Overall, I believe it is important to have transparency in our insurance industry. Insurance companies make billions of euro in profits as a result of governments making insurance a legal requirement in certain aspects of life. Therefore, it is perfectly reasonable that we have transparency, careful monitoring and protections for the consumer.

7:35 pm

Photo of Matt ShanahanMatt Shanahan (Waterford, Independent)
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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.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Moving on to the Rural Independent Group, there are four speakers. Deputy Michael Collins is first.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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We should not let the insurance industry off the hook. It should be held to account. We need to verify that reductions and awards facilitated in personal injury cases by the House of the Oireachtas are passed on euro for euro to consumers in order that policyholders see a reduction in their premiums as they take out insurance. Those savings must be passed on to customers in the form of lower prices. There must be no excuses. We have spent years and years discussing this matter here and it is falling on deaf ears. I fully support the Bill brought forward by Sinn Féin.

We saw during Covid how businesses were left high and dry with no insurance to cover them for closures. The way publicans were treated was nothing short of scandalous. Their businesses were and continue to be ruined and wrecked by Government. The insurance companies tried every which way to get out of it and it was like a scam in its own right until they were held to account by the courts. Some of them were trying to defend themselves after that again. They remind me a bit of An Taisce. They throw in appeal after appeal and, when they lose a case, they keep coming back again. The insurance companies are ruthless in their attempts to destroy people instead of working with people. I am very annoyed at the way insurance companies have worked.

We also saw the debacle with insurance related to the flooding in west Cork, including Bantry, Skibbereen, Bandon, Rathbarry and Rosscarbery. People had property insured but when they get flooded once, they will never again get insurance. The Government brought in a compensation package for businesses. That package should have covered businesses, regardless of whether they had insurance. I know of hotels in Skibbereen and many businesses in Bantry that were destroyed. It is crazy that some that had insurance could not get the compensation package and some of those that had insurance are still holding out. I met a businessperson over the weekend who still has not been paid by the insurance company. He told me they do not know whether they will get the business up and running again. Young drivers all over the country are being quoted enormous amounts. These young people cannot afford that. The Government has to come in here.

On a different issue completely, I met with the west Cork credit unions yesterday. The Minister of State is in charge of credit unions and I would appreciate if he would act quickly. Credit unions in west Cork, and others, are in a desperate situation.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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I thank Deputy Doherty for bringing forward the Bill and compliment him on his relentless challenge to the racket in insurance. I wish the Minister of State well. He is a decent man and will try his best but I am disappointed tonight that he is buying another nine months for the insurance companies to rob us blind. Why would they not when the Government has let them off? This has been going on for decades. We have seen it in this episode with Covid. Publicans who have business interruption insurance ring me every day and the insurance companies use every rule in the book to keep from paying, such as the fact there was not an outbreak in the public house itself. It is blackguarding.

I operate on the principle of “Ní neart go cur le chéile”. We are all in this together. We were not all in this together. Big businesses have cleaned up during this Covid pandemic over the past 14 months. Insurance companies had no claims going on because pubs and many other businesses were closed and they gave a miserly couple of euro off. In some cases, it was €40 out of a €7,000 premium. Now they are pressurising them to get their insurance renewed. They give them 21 days and if they do not go with them, they will be penalised again. It is a shocking cartel out there with price gouging and everything else.

Young people are trying to get on the road, but face the ineptitude of the RSA and the NDLS and the carry-on there. There are 100,000 people waiting to get going. How will we get our economy recovering? Pass-through charges are extortionate. One hotelier was charged €30,000 while his hotel was closed. It is a racket. Big businesses can do what they like. In this case it is insurance but it is all across the way. I raised during Leaders' Questions last week the way things are stacked against small business and the young person trying to get on the road.

I know there are some fictitious claims, but they have been rooted out. I compliment the Regional Group on bringing forward the Bill introduced by former Senator Pádraig Ó Céidigh. We must act. We cannot wait for another nine months, as suggested in the amendment, because people are being drained of their very lifeblood by insurance companies who refuse to pay.

I salute the four gallant publicans in Dublin who took the case, but like my colleague Deputy Collins said, it is not happening. They have not been paid. The insurance companies are just prevaricating, stalling and stonewalling. They cannot say "No". They are friends of Fianna Fáil. They are friends of Fine Gael and the Government is now supported by the Green Party. They support each other and to hell with na daoine óga and na daoine beaga.

7:45 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I thank and compliment Deputy Doherty and Sinn Féin for bringing forward this very important topic for debate tonight. I acknowledge the presence of the Minister of State, who is a decent and honourable man. We wish him nothing but good luck in his role. We will be relying on him 100%. The problem is as outlined in the Bill. We want to bring down the cost of claims and we want to give the savings back to the customers. Young people are paying enormous sums trying to get on the road. Young boys and young girls want to get the wheels underneath them and to get on the road to earn a living, go to work and do what they have to do in their lives.

We have serial complainants. I have no problem in the world with people claiming if there is a serious accident or if something happens, but one thing that should happen in the courts is that a person's previous history of what I call "misfortune" should be taken into account, in other words, if they seem to find holes in the road to fall into or if they seem to continuously be bumping and humping into people along the road and claiming. Why does that not come out during the course of a court case? Why is a person's record not laid bare to see if he or she has previous claims? If somebody is continuously claiming, there is something continuously wrong. We have had situations in places such as Kenmare and Sneem where businesses were flooded. Sometimes people find it awfully difficult to get insurance again afterwards. We must be able to take on such situations and make sure businesses can get insurance and that they can be up and running and have proper cover.

With regard to bringing down the cost of claims, one thing to do is ensure that there is due vigilance and when claims are made that they conform to the rigour of the law. If an individual gets an amount for one type of damage in England or in any part of Europe, why should a person be able to get double the money here? I am not trying to make little of it but a person often got a lot worse than a soft tissue injury or a sore neck on a football field or playing hurling and he or she managed to keep going afterwards and there was nothing about it. Why is it that in Ireland there seems to be this game of going to the courts? It is like an industry in itself. That is wrong. It should not be allowed. Somebody has to pay. There is no such thing as a free lunch. It is the customer who is paying and I want to stand up for those customers here tonight.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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I am grateful to Deputy Doherty and Sinn Féin for bringing forward this very important Bill. All of us have spoken so many times before about the insurance industry and the unfairness that is going on. Those who drive taxis, buses, and commercial lorries are all penalised, as are businesses such as publicans and young people who have done nothing wrong. They deserve to get a chance, but they honestly do not. They have not been getting a chance and I am afraid they will not get a chance. When elderly people and young people have cars that exceed ten years of age the insurance companies invariably tell them they cannot be insured. They will not insure them even though they have a valid NCT or MOT. What is missing out of the frame is that the insurance companies have a monopoly. Whatever they say about Mr. Quinn, we were able to pay for insurance when he was there, but now whatever they get is not enough.

The big worry for many people and businesses is that they will not even get a quote for next year. That is very wrong. They are people who are employing others and who have done very little wrong. I see what insurance companies are doing. They are paying out and not contesting claims at all. One insurance company told me it would have to give money to a man because he was a customer of the company's as well. He did not deserve money. That is the truth of it. He did not deserve what he got, but someone had to pay a dear claim and it put up his insurance because of the actions of the insurance companies.

It is very evident to me that the insurance companies and the banks are destroying young people. They are not giving them a chance to either put a roof over their heads or to put a car on the road. Young people are entitled to get a chance to go on the road and if they blot their copybook, then peg the book at them but give them a chance to go on the road, which they are not getting.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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I fully support the Bill and what it intends to do. I pay tribute to Deputy Doherty for bringing it forward because it is necessary and important to do so. The Bill intends to ensure that the Central Bank is informed by insurance companies on the effect of the personal injury requirements on insurance. We all know that insurance is a statutory requirement that everybody needs to have but, in reality, insurance companies use it as an excuse. As soon as a claim becomes possible, they try to get out of it. That is the reality of the situation.

Unfortunately, because of the system we have in the Dáil, Opposition Members cannot introduce Bills that make real change. I imagine this Bill could be a lot stronger and could be introduced in a way to make real changes to how the insurance system works. I welcome the Government's acceptance of the Bill, but it is kicking it down the road for nine months. What does the Government hope will happen in that nine months? In recent months we have seen the Government accept most Private Members' Bills and motions that have been introduced. Is the Government afraid of seeing the figures go up when the vote takes place? Rather than the Government getting a kicking on social media and in the press for voting down the legislation, it has decided to kick it down the road for nine months on the basis that it will probably die on Committee Stage or it can be finished off in some way that will attract less publicity and look better for the Government. The Government wants to look good by accepting everything: to show it wants to help everybody by taking something on board.

I do not know if this is parliamentary language, but it is basically a load of crap. I would have more respect for the Government if it would stand up and say why it is opposing something or why it thinks something is not working or could not work. Why does the Government not come straight out and say that what it wants to do is ensure that insurance companies in this case have an easy ride, so that they can make money and keep it in the system as quickly as possible, and they do that on the backs of those in society who must have insurance because people cannot go on the road or open a business unless they have insurance? Why does the Government not say its role is to make it as smooth as possible for insurance companies in order to keep them here? That is really what is happening.

The system has been exposed big time through the pandemic. Insurance companies included pandemic insurance as an add-on to make their insurance look far better than what anybody else was offering, but as soon as it happened they tried to find an excuse not to pay compensation. People had to take cases and go to court. The cases are going through the courts now and people have won. Insurance companies will not offer pandemic insurance from this point on because they know there is a chance they could get caught.

They will find something else to offer as a marketing tool. That is sad but it is the reality of the situation and it will not change while this Government is in power.

I spoke earlier about the Government accepting motions. I moved the Thirty-Seventh Amendment of the Constitution (Economic, Social and Cultural Rights) Bill during Private Members' business some months ago calling for a referendum to put those rights in the Constitution, including a constitutionally protected right to housing. Rather than vote it down, and even though we know the Government is not in favour of that, it decided that the Bill would be read two years later. That makes it look like the Government supports it but after two years, when the Bill comes up on Committee Stage, I will be pushing it big-time and we will see then if the Government is actually in favour of it. I do not think it will be and it will look to kill it off completely. A number of weeks ago, I tabled a Private Members' motion on the Common Agricultural Policy, how to make it work for small farmers across rural Ireland, in Donegal, Mayo and along the west coast, and how European money could be used to benefit all of them. The Government accepted the motion which, at the time, was a tribute to it, or so we thought. Now, however, we discover there is a call for an emergency motion in the House because the Minister for Agriculture, Food and the Marine is in Europe, negotiating the Common Agricultural Policy in order to undo what this House agreed to do and said should be done a few weeks ago. That is the nonsensical nature of this whole process and it shows up what the Government is trying to do. It is kicking it further down the road and making sure it does not have to make a decision, but it does not want to appear that it is voting against these motions. It is sad that is the level at which the Government is going to pursue it. I think I am right. The Government might argue I am not but if I am, time will tell.

7:55 pm

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I thank Deputies for an engaging discussion on the issue of insurance reform. It is clear we all agree on the need for ongoing work to improve both the affordability and availability of all types of insurance. That is the Government's policy intention and that is why we published the action plan for insurance reform in December to drive this agenda forward. While the Government appreciates what the Deputy is trying to achieve with this Bill, it is still not clear from this debate what added value the Bill could provide beyond what the national claims information database currently offers in monitoring claims costs and premium prices. A single Bill cannot be seen as holding the insurance industry to account. Instead, there must be ongoing engagement by the Government's Cabinet committee subgroup and the insurance industry, as well as other stakeholders representing civic society, business and consumers, to ensure that any savings are being passed on. This is the approach Government is driving from the centre.

This Bill will do nothing to help the average consumer or business when they are purchasing insurance. The Government is interested in implementing real reforms which bring tangible benefits. The approach proposed in this Bill is merely a data collecting exercise, an administrative burden and an additional cost on insurers that will only show what alternative data sources already illustrate, namely, whether prices are falling or rising. Whether this is attributable to the personal injuries guideline changes and what premiums may have been in the absence of these guidelines is quite academic. What is clear is that progress in this area needs to be multi-pronged and involve a cross-departmental policy approach. In time, we will be able to draw our own clear, evidence-based conclusions from future national claims information database reports as to the impact of the new guidelines on insurance premiums, along with other aspects of the Government's reform agenda.

The availability of insurance is crucial for businesses, in particular as we emerge from the pandemic and begin rebuilding the economy. The Government has provided unprecedented support to those businesses over the past year and we expect insurers to play their role as society starts to reopen. Even before Covid-19, Brexit and a tightening in the global markets for certain types of insurance, such as professional indemnity insurance, had started creating supply pinch point issues here and worldwide. As the Minister of State with responsibility for Government procurement, I have seen the impact of this, particularly in the construction sector. One of the Government's key aims is to promote competition in the insurance market here, and that includes attracting new providers to enter. Unfortunately, this Bill will not assist in either of those aims. Indeed, if we do not succeed in getting the balance correct, it could send out a message that runs counter to those very objectives.

I note from the debate, and from media coverage over the weekend, reference to a survey hosted on the Sinn Féin website, which indicates that 58% of the 1,363 respondents who received their renewal since the new guidelines came into effect saw their premiums increase. While some customers may still see increases in their motor insurance premium, perhaps because of their individual circumstances, we need to be cautious in drawing conclusions from these figures as it is simply too early to do so. The Minister for Justice is to make a report to Government by the end of this year assessing the impact of the guidelines. Official data have shown that prices have been declining for some time. Accordingly, these findings are at odds with official data published by the CSO and the Central Bank.

While the Opposition may feel that it has had a monopoly on introducing insurance legislation, I remind the House a large volume of insurance legislation has been introduced by Government in recent years, particularly arising from the cost of insurance working group's recommendations. These include the Central Bank (National Claims Information Database) Act 2018 to increase transparency around insurance costs and claims; the Insurance (Amendment) Act 2018 to enhance the insurance compensation fund framework to protect third-party motor claimants in the event of an insurance firm failure; the Judicial Council Act 2019, which provides for a Judicial Council setting new personal injury guidelines in place of the current book of quantum; and the Personal Injuries Assessment Board (Amendment) Act 2019 to enhance the PIAB and provide for amendments to the Civil Liability and Courts Act 2004 to make it easier for businesses to challenge cases where fraud or exaggeration is suspected. In addition, the Consumer Insurance Contracts Act 2019 was introduced with the assistance of the Government and Deputies across all parties. I remind Deputy Doherty that a number of substantial amendments were introduced by the Government to make that particular legislation workable and that remaining provisions will be commenced in September. All of these legislative measures, I contend, represent a solid record of legislative action in this critically important sector.

I assure the House that there has been substantial engagement with insurers in recent months. The Tánaiste and a range of Ministers from all Government parties were actively involved in the matter. The key stakeholders have been met and the Minister of State, Deputy Fleming, has recently concluded a series of engagements with the main firms. In these, he raised the need for the industry to respond to both the Government's ongoing reforms, in particular the new guidelines, and the Covid-19 pandemic by lowering premiums and continuing to offer forbearance measures. These were undertaken in a positive manner, with many insurers indicating they intended to reduce premiums in response to the new guidelines. This was confirmed to Oireachtas Members as recently as last week. Further ministerial meetings will take place later this year to review progress in that regard.

In conclusion, the amendment seeking to have the Bill read a Second Time in nine months is the correct course of action. We should not lose sight of the fact the Government has developed a comprehensive, whole-of-government action plan for insurance reform that addresses insurance issues in a structured, targeted manner, and we are holding the insurance industry to account in regard to passing on savings arising from reforms delivered to date. In addition, we will examine whether existing tools such as the national claims information database can be used to do this more effectively. This will feed into work under way within the Department of Finance on considering a number of potential legislative measures in regard to consumer matters, including issues that were discussed this evening. Accordingly, we are not supporting the moving of this Bill and, instead, we seek that the matter be considered again by the House in nine months after important work has been done.

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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I wish to share time with Deputy Quinlivan.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that agreed? Agreed.

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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I thank Teachta Pearse Doherty for all of the work he has done, not just on this important legislation, but on the area of insurance.

He has been rightly recognised here this evening by those who care to pay attention to exactly what is happening.

I listened with interest to the Minister of State. I often think how when Ministers come in and read scripts, it can really sound like they are reading them for the first time. I wonder to whether they believe all the stuff that is in the text. The Minister of State indicated that a single item of legislation will not hold the industry to account. Of course it will not, but doing nothing will definitely not lead to the industry being held to account. I was fascinated to hear the multi-pronged approach that the Minister of State just outlined because it does not seem to be having an impact. Instead of reading from scripts, what Teachta Doherty and we have done is talk to people. Some 58% of the people who responded to the survey said that their premiums have gone up. When people say the proof of the pudding is in the eating, the eating of the pudding shows that the premiums are going up. It is not good enough to say we should wait or add another prong to the multi-pronged approach or we should try to put another name on it - what people need and want is action.

I am talking about people in my constituency who work in tourism-dependent industries and experience-type industries and who cannot afford to insure their businesses. I am talking about young people who, because of poor transport infrastructure, have absolutely no choice but to have a car to be able to get on the road. Those people do not want to wait and they should not have to wait nine months for another prong to be added or for there to be more deliberations or whatever it is that the Minister of State is doing because it is not working. People want concrete action that will achieve results. I talk to businesses and they are wary and fearful about reopening. The last thing they need to see is their insurance premiums going up. I urge the Government to think about the people who are affected, withdraw the nonsensical amendment, work with Teachta Doherty who has the support of people in the House and the credibility and track record and start to deliver for people who need to see their premiums come down.

8:05 pm

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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I thank my colleague, Deputy Doherty, for bringing forward the Judicial Council (Amendment) Bill. The work he has done to tackle the artificially high premiums has been tremendous. If adopted this Bill will have a really positive impact on insurance customers across the State. I was disappointed to hear the responses from both Ministers of State. When I lived in America, people would use the phrase "mañana, mañana", which means tomorrow, or we will basically do nothing. The nine months mentioned by the Minister of State suggests that he is stalling again, kicking the can down the road. We accept that we need insurance for myriad reasons, and there are associated costs and we presume this cost will be fair. What is not acceptable is the artificially high premiums and the failure to pass on savings and damage awards to loyal customers.

On 24 April, the personal injuries guidelines came into effect. They reduce the cost of damages awarded by insurance companies. These guidelines reduce the cost of pay outs for personal injury claims by between 31% and 69%. In the month or so since these guidelines came into effect, the premiums paid by consumers remained high and less than a quarter of consumers have seen their premium reduce. It is worth reminding ourselves that the when the insurance companies were before the Joint Committee on Finance, Public Expenditure, Reform and Taoiseach in 2019, they committed to reducing premiums if damages to personal injuries were reduced. They have not done this. It was suggested that if damages were reduced by 50%, motor insurance and business insurance would fall by an average of 15% to 20%, respectively. This has not happened. The promise to reduce premiums has yet to come to pass. We cannot rely on insurance companies to pass these savings on to their customers without pressure. Had they wanted to, they would have done so already by reducing premiums. We must take steps to ensure that these savings are passed on to people. Rather than sit back and hope that insurance companies act in the interest of consumers as that has been the approach of successive Governments with little reward, Sinn Féin is introducing this Bill which would benefit motorists, homeowners and business owners. It will create the conditions where much fairer pricing can be provided to insurance customers who for too long have been overcharged for their premiums. Our nearest neighbours in Britain have similar regulations, with many of the same insurance companies operating in both jurisdictions. If we were interested, we could sort out this issue if we wanted to.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I thank all the Deputies who spoke in tonight's debate on this legislation and all those who had kind words for myself and my party's campaign on insurance costs. There was reference earlier to the Government trying to steal my homework. I do not give a damn which Minister takes any of the work that I have done and runs with it. They can have it all, they can have this Bill, the dual pricing legislation - they should go and do it, run with it, but do not delay it. I was taken aback by the contribution by the Minister of State, Deputy Ossian Smyth. It was mind-blowing because it was basically saying "You're not as great as you think you are". I do not care. I have only one agenda, and that is to drive down insurance costs. That is all this is about. He said that this legislation will do nothing. He says after tonight's debate he still does not understand what is required. Let me spell it out to him, after his very embarrassing contribution to the House. This legislation is based on what the existing companies in Ireland, AXA, AIG, Aviva, Alliance, Zurich and RSA, have to do in the North and in Britain. In Britain they gave a commitment that if awards were reduced, they would pass on the savings pound for pound to the customers. In this State, they gave the finance committee the same assurances in 2019. There is absolutely no way that we can ever know if that commitment is being delivered on. Why? It is because although the national claims information database collects a great deal of information from insurance companies, there is a crucial piece of information that it does not have the power to collect, namely: what would the premiums be if these new guidelines did not come into effect; and what level of awards would be paid out by the insurance industry if these new guidelines did not come into effect. That is what these insurance companies have to do, audited by an independent auditor and provided to the central bank, the Bank of England. That is what this legislation demands of them to do. That means the Government holds them to account.

We can find out whether they are delivering on their promise. We may see some companies reduce premiums by 8% or maybe 12% or 14% but nobody in this House will ever have an idea whether that was actually passing on the full amount of the reduction in awards that was enabled through the passing of the Judicial Council Act. If the Minister of State did not understand it, perhaps he understands it now. This is a serious piece of legislation, which, thankfully, the Alliance for Insurance Reform is backing. I welcome the work it has done with all parties across this House on reforming the insurance industry and driving down the cost of insurance. This is not a gimmick. This is about making sure that prices that should have been reduced for every single motorist who did not have a claim or who did not change their policy. They should have seen a reduction after the implementation of these guidelines on 24 April. The Minister of State said that the survey we conducted was out of kilter. I was talking to a Deputy earlier who said it was a pity he had not had speaking time because he had just got his insurance renewal and the price had increased by €100. This is what is happening in the real world and we are letting the industry off the hook.

Earlier, the Minister of State from Fianna Fáil said that this is one element and it would be naive to think it was a magic bullet which was going to fix everything. I never said that. He went on to list reports, and say that we had to wait for reports. One report was on dual pricing. It was the result of a super-claim that I made in 2019 to the Central Bank that actually instigated that report. Two reports we already got, the final one in July. Then he talked about the coming into effect of the Consumer Insurance Contracts Act 2019, whereby people will be able to see their claims and premiums over the last five years. Again, that is legislation I drafted, specifically that section, and brought into effect in 2019 but the two Ministers of State here have been delaying its implementation in the interim. It will not come into force until September. The Minister of State, Deputy Fleming, went on to state that the national claims information database will have public liability information. That is hugely welcome, and I argued for in 2019 when the legislation was being passed, and should not be delayed. Then he said we would have crucial information when more information relating to motor insurance is published by the national claims information database. That will not actually not take into account the timelines here.

As I said, I do not care whose name is on the legislation. What I do care about is that insurance companies are held to account. It was an embarrassing contribution given by both Ministers of State this evening that could have been written by any one of the big giants of the insurance industry, giants which only last week rejected the findings of the Competition and Consumer Protection Commission to the effect that they are operating a cartel.

The negative point is that the Government has been delaying matters for nine months. The positive one is this legislation will pass Second Stage. This will send out a signal to the industry that it has nowhere to hide. I noted the comment by the Minister of State, Deputy Fleming, to the effect he is considering his own legislation and he may take the spirit of this legislation on board. I implore him to address this. I do not care whose name is on the legislation. Let us do this. Let us hold the industry to account and make sure it passes on, euro for euro, the premium reduction it promised two years ago.

Amendment put.

8:15 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In accordance with Standing Order 80(2), the division is postponed until the weekly division time tomorrow night.

Debate adjourned.