Fintan Warfield (Sinn Fein) | Oireachtas source

In the Minister of State's remarks to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach last November, he set himself a high standard for a report that would not lie idle on the shelf of the Department but would be implemented in time. He said that he was prepared to put pressure on those who were holding up progress or refusing to co-operate. It is worthwhile to quote at length from what he said:

There is absolutely no point in this committee or the working group publishing reports if we do not have a detailed timeline around it. I have met the insurance companies and Insurance Ireland on this and have said to them that we are going to come with an ambitious and a detailed timeline for the implementation of every single recommendation we put forward. We want to show a determination that we are serious about this to all the players in the market. That is why when I talk about it, and I hope the committee sees this, and when we come to publish the working group's report with the detailed timeline reflecting all the good work done by the Oireachtas committee and in showing the determination to get things done and to take action, it will have a calming influence on the recent spikes we have seen in the cost of motor insurance premiums.

Sinn Féin believes that the problem with this report and the implementation of the recommendations is that the onus is placed almost entirely on the industry. This is the same industry that is responsible for the unexplained and reckless 50% increases in premiums. It is the same industry that my colleagues spent many weeks questioning and cross-examining at the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach in order to get answers. I have heard from a colleague that her insurance premium has gone up €800 in four years, all of which were no-claim years. She has held her licence for six years. I know of a person who saw a 50% increase, once again without any explanation given. Premiums that rise without any documented explanation annoy people the most and leave them fearful of the next quotation from their insurers. The report from the finance committee stresses that this matter simply must be tackled head-on. When he appeared before the committee, the Minister of State said that this issue is being dealt with by an implementation committee nominated by insurance company CEOs. The very people who hiked insurance premiums are to sit around and decide if they did a bad thing in increasing their profits. Even if, as is claimed, the CSO figures show a balancing off of increases, we are still left with a net 50% increase.

Another example of how this report defers to the industry is the proposal in recommendation 26 that the insurance industry should actually fund a section of An Garda Síochána. I can understand the intention and one could argue that if there are major sporting or community events they have to provide a contribution towards that. What is being put forward, however, is something different. It is a specialised and dedicated insurance fraud unit in An Garda Síochána that would be funded by the industry. This is not a contribution to the policing of a community event. This measure would basically define those who are policing an event as a Garda insurance squad and the insurance industry would pay their wages. I believe this to be a risky concept. I can understand the sentiment behind it, which is to question whether the insurance sector should make a contribution or pay a levy. When one has that type of direct engagement between members of An Garda Síochána and the industry that pays them, it is quite risky and we should stop to consider what precedent is being set. A freedom of information request my colleague, Deputy Pearse Doherty, produced evidence that in August 2015 the Governor of the Central Bank was writing to the Minister for Finance pointing out that a number of non-life insurance companies had taken a very optimistic view of the future economic outIook, had built up an unsustainable overhead and had followed an imprudent pricing and underwriting approach. In other words, the industry made mistakes leaving itself exposed to shocks. In an age of 0% interest rates, the old model of relying on returns from investments and bonds has failed them and us. Of course, fraud, extra regulation and other factors contribute to the price of a premium. The question is how much have these factors changed. The answer seems to be very little. The answer to why premiums have increased cannot be put down to these static factors.

Many of the solutions put forward by the industry are either pure distractions or completely unworkable. Those in the industry willingly spin the need for the book of quantum to reflect international norms. They know well that the book of quantum is merely a factual record of awards given. It cannot it be made fit a certain narrative because the industry is uncomfortable with the facts. Most brazenly of all, the insurers are still not prepared to accept that they have been less than transparent. Backroom deals, unrecorded awards and a lack of information to consumers suits only one side, namely, the insurers. Expert after expert has homed in on the lack of data and transparency as the key to bringing down prices. Home, flood and health insurance are all now rising beyond inflation. Motor insurance in the State is compulsory for all drivers. A private industry that is being investigated for anti-competitive practices cannot dismiss the anger relating to and the social and economic effects of their decisions and mistakes.