Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I thank Senator Lombard for raising the matter and for his good wishes. It is always nice when a good friend offers wishes of that nature and we are good friends. It should be noted that the Minister for Finance is responsible for the development of the legal framework governing financial regulation. Neither he nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. However, as has been stated, it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the availability and cost of insurance.

It was for that reason that the cost of insurance working group was established by the previous Minister for Finance, Deputy Michael Noonan, in July of last year. As the Senator noted, the first phase of its work centred on motor insurance given the large increases seen in the sector in recent years. As part of the consultations during that phase, the working group received a number of submissions from businesses on the increasing cost of insurance they were facing, in particular in employer liability and public liability cover. The submissions made it very clear that there was a pressing need to examine the rising and unsustainable cost of such insurance for businesses. Reinforcing that position are the Public Injuries Assessment Board, PIAB, statistics which indicate that employer liability and public liability insurance are the two largest areas, after motor insurance, where personal injury claims arise. In 2016, for example, public liability and employer liability applications represented 27% and 15%, respectively, of all applications received by the PIAB. By comparison, motor applications made up approximately 57% of applications. For those reasons, the working group decided to undertake a second phase to see what could be done to tackle the cost of employer and public liability insurance as those are the two core types of insurance which the business and agriculture sectors require. In carrying out its work, the working group is considering the impact of the cost of insurance on the competitiveness of particular business sectors, the impact of health and safety issues on the cost of insurance and other market issues.

The working group is also building upon the previous work done in the motor phase on personal injury data, the effect of legal costs on insurance costs, current claims compensation arrangements and the cost of claims, and the impact of unlawful activity on the insurance sector to determine how it can be applied in the employer and public liability insurance claims areas.

The working group has held extensive consultations with a range of stakeholders including the Irish Farmers Association, which provided a submission to the working group. There have been two meetings with Meat Industry Ireland, one with officials and one which I held. I have also very recently received a submission from Donegal Marts Association. Consultations have also been held with, for example, IBEC, ISME, Chambers Ireland, the Irish Hotels Federation and RGDATA, the Retail Grocery Dairy & Allied Trades Association. A range of issues has been raised by the business and agriculture sectors including lack of competition in the insurance market, frustration with inconsistency of awards, and huge legal and business costs associated with challenging claims through court process, among other things.

It is envisaged that the final results of the second phase will take the form of an addendum to the existing report. As with the first phase, the aim is for all relevant bodies and stakeholders to work together in order to deliver fairer premiums for businesses without unnecessary delay. As it is likely that employer and public liability risks are a major factor in the cost of insurance for those involved in agriculture and business, any recommendations emerging from the review should be of relevance to those sectors.