Thursday, 16 December 2021
Ceisteanna Eile - Other Questions
I also want to wish the Minister best wishes for Christmas before we all fall out.
I ask for an update on progress that has been made under the action plan for insurance reform. We hear a lot about reductions in personal injury awards. What effect is that having on insurance policies?
I propose to take Questions Nos. 95 and 164 together. The action plan for insurance reform contains 66 cross-departmental actions that aim to improve the cost and availability of insurance. This reform agenda is progressing well. The first implementation report published by the Tánaiste’s Department last July showed that 34 of the 66 actions had been completed.
Key reforms include the establishment of the insurance fraud co-ordination office within An Garda Síochána in September and the publication of the final report of the Central Bank’s review of differential pricing in the motor and home insurance markets. I will shortly go before the Committee on Finance, Public Expenditure and Reform, and Taoiseach to deal with pre-legislative scrutiny of the elimination of loyalty penalties in the course of 2022. I appeal for everybody on that committee to complete pre-legislative scrutiny today so that we can move onto the legislation as quickly as possible and pass a Bill in the Dáil and Seanad early in the new year.
Other reforms include the expansion of the national claims information database to gather data on public liability and the publication of the first report on this subject. We now have information we never had before, which is helpful. The Central Bank’s third report on the claims information database on private insurance has been published in recent weeks. We also have the Criminal Justice (Perjury and Related Offences) Act 2021, and perjury is now a criminal offence. Personal injuries guidelines were completed at the end of April and have been implemented. We will produce a review early in the new year on how they are progressing in practice. We said we would do that after a six-month period and work is commencing on that. We will publish an interim report on that within a short period, which will be available in the new year. We established an office to promote competition in the insurance market, which is essential because of the small size of the Irish economy and the impact of Brexit which affects competition. We are introducing new regulations on solicitors' advertising.
All in all, quite a lot has happened. Motor insurance premiums decreased by 8% last year and 7% so far this year, based on the most recent figures from the CSO.
Given the 40% reduction in personal injury awards since the new personal injuries guidelines came into effect, reductions should have been passed on to members of the public and organisations and businesses that need them. Instead of reductions, the businesses in the entertainment sector are under huge pressure right now and have seen hikes in their premiums. Public liability insurance costs have also increased by 15%, according to the Alliance for Insurance Reform. There have been reductions in some sectors, but increases in others. The insurance industry needs to be taken on.
It is essential that insurance companies immediately reduce insurance premiums to reflect, euro for euro, the 40% reduction in personal injury awards since the new personal injury guidelines came into effect. I must call on the Minister to remove the delay the Government has placed on the Sinn Féin Judicial Council (Amendment) Bill which would hold insurance companies to account and ensure they reduce premiums in line with the reduced cost of claims. What is going on with this?
This is obviously a case where a significant amount of work has been done. Some in the industry and some who have been lobbying for a long time would have stated that we should have made some of these moves previously but, as the old saying goes, we are where we are. I would separate out public liability insurance. That is a specific piece of work that needs to be done. It is absolutely necessary we follow through as quickly as possible in dealing with differential pricing and what you can only term morally as "criminal" as regards the loyalty penalties. We need to see that the personal injury guidelines work from the point of view of those who are paying insurance premiums. It has not happened to date. I want to know the Minister of State's engagements with the insurance sector and then we need to make moves on duty of care and other matters. I am also in on another question and we will get more time later.
As the Deputy rightly says, the categories of car insurance and home insurance are separate from the issue of business insurance. There have been reductions in car insurance, which affects every household in the country, this year and since the guidelines came in.
Three major insurance companies were at the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach this week. Two of them said they have reduced prices by 10% this year so far and another said it reduced them by over 5%. That is confirmation of what the CSO is saying.
In relation to business insurance, an important Central Bank report issued recently showed that for the vast majority of businesses the average cost of insurance is under €2,500.
There are high-risk sectors in the Irish economy that have difficulty getting insurance and those sectors need to be helped. That is why I met specifically with the Alliance for Insurance Reform on a couple of occasions recently, and I will be doing so immediately in the new year again, on the euro-for-euro reductions we are seeking. Those reductions that are happening have been confirmed by the Personal Injuries Assessment Board, PIAB. Obviously, some people are not happy and want to appeal them to the courts as well, and that is taking some further time.
I accept the Minister of State has met the insurance companies but he will forgive me if it seems like a kid-glove approach to the sector that has prevented community events from taking place during the summer and for the past 12 months. It has made driving, which is a necessity, costly. It is not a luxury anymore.
The public thinks the Minister of State is being too soft on the insurance companies. They are the ones that are profiting from the reductions in claims because the Minister of State will not implement the legislation Sinn Féin has brought forward.
Only this week, the Alliance for Insurance Reform called on the Minister of State to deliver on his promise to deliver a properly balanced duty of care, if applicable, to every premises and event in the country. I call on the Minister of State to stop letting the insurance industry off the hook and to put the public first for a change.
Pressure needs to be maintained on the insurance companies. That goes without saying. There is an absolute requirement that those engagements are robust.
I will deal specifically with public liability insurance. Let us accept we need insurance. We particularly need insurance in what is high risk. We have seen the tragic circumstances in Tasmania.
I have dealt with the Minister of State in relation to the entertainment industry, the leisure industry, and especially in relation to what we term bouncy castles. Following on from some conversations with Deputy Fleming and the Minister of State at the Department of Enterprise, Trade and Employment, Deputy English, I am dealing with Insurance Ireland specifically. We will also be dealing with the Minister of State at the Department of Housing, Local Government and Heritage, Deputy Peter Burke, specifically on guidelines and regulations that are probably needed within that industry. It is from the two ends. We need licensing, regulation and protections and then we need duty of care so that there is also a protection of these businesses. There are community centres, businesses and community organisations that face hitting the wall and we need action now. It is beyond time.
The principle of risk equalisation works well and it makes sense in the health realm. It makes no sense whatsoever insofar as flood cover insurance is concerned. In my county of Clare, a county of 118,000 people, one person in 12 is unable to get flood cover on his or her insurance largely due to flood events that happened ten, 12 or 15 years ago. What we have since is a national database of flood maps. We have had umpteen work programmes that have remediated flood areas but still the insurance sector, time and again, is levying on other people. Because one house in a community of 2,000 or 3,000 homes took in a drop of water in 2009, the whole community has to pay a penalty. It is becoming a major barrier to people trying to sell their houses. If you go to a bank or if you go to your solicitor and conduct conveyancing, you will be advised not to take out a mortgage on that property because it cannot get flood cover. This also needs to be in the realm of insurance reform.
I agree with the Deputies opposite when they talk about balancing the duty of care. Before we came in here, we had it already arranged that I will meet with the Minister for Finance, Deputy Donohoe, and the Minister for Justice, Deputy McEntee, at the very beginning of the new year to progress that legislation. Work has already been done on it in consultation with the Attorney General. It is an absolute priority for the Government to get that legislation published as soon as possible. It is only fair to businesses. If somebody has a fall in a person's property, it is not always the fault of the proprietor. That is something we have to rebalance in legislation. I think everybody in the House will agree with introducing common sense in that area. We will be moving on that immediately in the new year. Also, a reform of the PIAB process is being finalised.
On the event in Tasmania, obviously, the sympathy of every Member of this House goes out to those affected by that shocking tragic event. All we can do is extend our condolences to the families of the people involved.
Flooding is a major issue. I have met with the Office of Public Works, OPW, the Minister of State and those involved, and through the Department of Public Expenditure and Reform, they are working on the flood map. The issue is to reduce the flood risk in those areas. That is the only way to make insurance more available in the flood risk areas.