Tuesday, 19 October 2021
Saincheisteanna Tráthúla - Topical Issue Debate
I thank the Minister of State with responsibility for insurance, Deputy Fleming, for taking the debate.
An ice rink operator in Limerick city, Fran O'Donnell, has gone public. He was on Newstalk earlier today. He has run an ice rink in Limerick for the past 15 years, claim-free, yet he cannot get insurance cover. That is the case with all ice rinks, which are a traditional feature of Christmas time up and down the country. Equally, other areas of the leisure sector cannot get cover. This situation arose for a number of reasons. It emerged following Covid that the mainstream insurance companies in Ireland are not covering many aspects of the leisure industry. In many cases, the sector was being covered by insurance companies operating from within the EU with passporting rights, and some from the UK. Brexit has been a factor also.
I understand there are applications before the Central Bank from insurance providers from Europe and the UK that would provide cover in the leisure sector, but the applications are taking a serious amount of time. I spoke to some insurance providers in Ireland who are seeking to become registered to provide insurance. They are going to other countries such as Malta where they are processed more quickly, and they can operate in Ireland with passporting rights. I would like companies operating in the insurance market in Ireland to be regulated here. It gives comfort both to the individuals being insured and the entire sector.
I urge the Minister of State to take up the matter with the Central Bank to see what the status of the applications are for these companies. Following the pandemic, we now need to carry out a proper review of the insurance cover that is being provided. There is an onus on the main insurance companies in Ireland to provide insurance across all sectors, not just specific sectors, which is the case currently.
The Minister of State is probably aware that the Alliance for Insurance Reform published a survey today and I wish to refer to a number of its features. First, the Personal Injuries Assessment Board, PIAB, announced a 40% reduction in the average personal injury award. Second, we must set up a register in the Central Bank or even in the Department. When the insurance companies were before the finance committee three years ago, the main companies gave me a personal commitment that any reduction in claims and legal fees would be passed on pro ratain insurance premiums. That must be tracked on a daily basis. That is something we must see happen.
Will the Minister of State contact the Central Bank about companies that are seeking to operate in Ireland to provide insurance cover? Will he examine why insurance cover is not being provided in the leisure industry? Will he contact the Central Bank on all those matters?
At the outset, I acknowledge the issues raised by Deputy O'Donnell regarding the difficulties being experienced by businesses in the leisure sector with respect to the availability of insurance cover. This industry plays a key role, not only from an economic perspective, but more importantly often serves to enrich the quality of life in communities across the country. Accordingly, I do not take the challenges that these companies and groups have experienced with regard to the obtainability and affordability of insurance lightly.
However, the Deputy will know there is no single policy or legislative initiative which the Government can take to persuade insurers to provide cover for a particular industry. Moreover, neither I nor the Minister for Finance can direct a company to do so. Notwithstanding this, we continue to prioritise insurance reform and this work is progressing right across Departments on the timely implementation of all the actions outlined in the Action Plan for Insurance Reform. As the Deputy knows, the first action plan implementation report was published in July, and 34 of the 66 actions contained therein are now completed.
As part of my intensive stakeholder engagement on the reform agenda, I have for my part met with many groups to discuss the difficulties in obtaining insurance. I am aware of the exit of a number of UK leisure insurers from the Irish market in recent years. Furthermore, I also understand that an unstable personal injuries environment was a large factor in those firms making the commercial decision to exit.
The new personal injuries guidelines were a key element of the action plan, which was delivered about six months ahead of schedule. When we came into government the legislation provided that the guidelines would be published by 31 October 2021, but we did it six months ahead of schedule, with the assistance of the Judiciary bringing forward its work. Early data published last week from the Personal Injuries Assessment Board shows, as the Deputy indicated, an average reduction of 40%. This is an encouraging development. It is my hope that this trend will continue and once bedded in will result in lower costs for businesses.
There should be a pound-for-pound reduction in the premiums based on the savings. However, it is important that people recognise that while personal injury claims is the single biggest cost affecting insurance companies, it is only one of the costs. What was covered by the guidelines was the smaller injuries, slips and trips and soft tissue injuries, which only represent a percentage of all personal injury costs. If there is a car accident, there are cars to be repaired and sometimes the personal injury is part of the overall cost of settling a claim. The very serious injuries that require lifelong treatment are not covered by the recent board because nobody would suggest that the costs of caring for a person in the long term should be reduced by the awards. While there are cost savings, our job is now to ensure that they are passed on to customers as quickly as possible. Once that trend gets established, we think it will be important.
The press release from the Alliance for Insurance Reform today acknowledged that there was a reduction of 10% in motor insurance renewal costs. It did say that some sectors have been very badly hit, despite the recent reform. That is especially in the area of high risk such as the leisure and entertainment area, and outdoor activities and pursuits.
The legislation dealing with occupiers' liability and the duty of care is being finalised and will be brought forward very soon. That is a key component and the industry wants to ensure that there is a fair spread of the risk associated with claims.
I thank the Minister of State. I note he indicated he will be meeting with the major insurance companies in the coming weeks, and I ask that this would take place with immediate effect. I also ask that he would communicate to the Central Bank that, if there are insurers from the UK, other EU jurisdictions or other European jurisdictions outside the EU, they would be fast-tracked in particular with regard to this area of cover.
I want to also make a further request. It is generally felt in the insurance market that matters will stabilise next year. We had Brexit and the pandemic and, as the Minister of State said, we also now have a trend where awards are coming down by 40%. I ask that the main insurance companies in Ireland would look to provide insurance cover, just as a once-off for this period and particularly over the Christmas period when there are family activities such as ice rinks, which are a tradition in all cities. Furthermore, we must ensure that the public insurance bodies, with the local authorities, would also look at this issue.
We are in a particular transition period where many of these insurers have left the market. We need to ensure that anyone who wants to come into the market is fast-tracked without any sort of delay in terms of the Central Bank approving their applications. Second, the Minister of State should ask the main insurance companies to step up to the plate in terms of a goodwill gesture to get over this period and to allow family activities like ice rinks, which are a tradition of Christmas, to proceed.
I again thank the Deputy for raising this issue. It is a very live issue, especially in the leisure sector, and he referenced the ice rinks as a particular area of difficulty. I will ensure the transcript of this debate is forwarded to those in the Central Bank tomorrow so they will be able to take on board the points he has made directly in the Chamber. While I cannot direct them as to what to do, I can certainly pass on the information and the content of this debate. They may not be sitting up watching the debate at this moment in time, but I will make sure they receive that information tomorrow.
I want to refer to recent developments that will help this sector move forward. Obviously, we know about the PIAB report in regard to the personal injury guidelines; we made perjury a statutory offence for the first time this year, which will help; and, the Central Bank published a final report on differential pricing. Today, the Cabinet approved a general scheme for an insurance (miscellaneous provisions) Bill, details of which I expect to be published tomorrow. That deals with the specific issue of price walking, whereby there was a loyalty penalty for people who had car insurance or home insurance for a long number of years. We will ensure that is no longer legally allowed from 2022 onwards. The reform of the duty of care legislation, the Occupiers Liability Act, is progressing very quickly and the enhancement of the enforcement powers of the Competition and Consumer Protection Commission is also being dealt with, together with bringing forward the general scheme of a Bill to reform PIAB. We are reducing insurance fraud through the Insurance Fraud Coordination Office and the Central Bank has issued its report on differential pricing. I am also meeting the Garda Commissioner in connection with the issue of uninsured motorists. That is all in the insurance area and dealing with those issues will improve the environment for people through extra competition into the future.