Breeda Moynihan-Cronin (Kerry South, Labour)
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Question 69: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the progress made to date with regard to the implementation of her action plan for the insurance industry; and if she will make a statement on the matter. [13824/04]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The insurance reform programme that I announced on 25 October 2002 comprises a comprehensive set of inter-related measures designed to improve the functioning of the insurance market. I chair a ministerial committee established to drive the co-ordinated implementation of the reform programme across the relevant Departments and other bodies concerned. Substantial progress is being made on a range of measures that will radically overhaul the functioning of the insurance market and help tackle the high cost of insurance.

The key measures include the following: implementation of the recommendations in the motor insurance advisory board action plan within a target timeframe — to date, 32 of the recommendations have been fully implemented, four have been partially implemented and work is in progress on the implementation of the other recommendations; establishment of the personal injuries assessment board — the Personal Injuries Assessment Board Bill 2003 completed its passage through the Houses of the Oireachtas on 19 December 2003 and was signed into law on 28 December 2003. The board was established and the members were appointed on 13 April 2004. It is intended that the PIAB will commence dealing with employer liability cases from 1 June 2004; and the undertaking by my Department and the Competition Authority of a joint study into the insurance market will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. The bulk of the study was completed in 2003 and a preliminary report and consultation document on competition issues in the non-life insurance market was published on 18 February 2004. Following a two-month consultation period, a final report will be published which will contain recommendations based on its findings.

Significant progress has been made by the Department of Transport in the implementation of the road safety strategy. The Government has given approval to the Minister for Transport for the drafting of the heads of a road safety Bill. It is intended that this Bill should be enacted in this Dáil session. The Minister for Justice, Equality and Law Reform published the Civil Liability and Courts Bill on 11 February 2004 and it is currently before the Houses of the Oireachtas. The Bill contains measures to streamline the law relating to personal injury claims, including measures to deal with fraudulent and exaggerated claims.

While EU law prohibits the imposition of price control on insurance I have made it clear that I consider there to be an onus on the insurance industry to ensure that the reforms to be taken will have the effect of significantly reducing the cost of premiums to consumers and businesses. Indications to date are that the reform programme is having its desired effect. The CSO publishes monthly indices of costs for a number of classes of insurance. These statistics show that there was a reduction of 12.9 index points, 12.1%, in motor insurance between the months of October 2002, when the programme was launched, and March 2004. This is the latest figure available. The reduction in premiums between March 2003 and March 2004 is 14.4 index points, 13.3%. This is a bigger decrease as premiums had continued to rise for some months after the launch of the programme before its effects were evident.

As implementation of the reform programme continues, I expect further reductions to occur in all forms of insurance. I am also confident that the measures the Government is putting in place to reform the Irish insurance market will attract new players into the market, leading to further downward pressure on premiums.