Liz McManus (Wicklow, Labour)
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Question 45: To ask the Minister for Transport the action he has taken to ensure that reductions in insurance compensation payments are passed on to the consumer through improved car insurance premia; the action he is taking to encourage more insurance companies to incorporate loadings or savings on their premia in respect of penalty point offences; and if he will make a statement on the matter. [30063/06]

Martin Cullen (Waterford, Fianna Fail)
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I have no direct responsibility in relation to setting of motor insurance premiums. Insurance cover is provided based on actuarial or statistical data or other underwriting or commercial factors.

It would be important to recognise at the outset that the Personal Injuries Assessment Board award compensation at the same level as the Courts. However the legal costs are substantially lower than processing a claim through the courts. The insurance industry points out that through their own research and using Central Statistic Office data, insurance premiums are now, in real terms, lower than at any time since 1992.

As stated earlier, motor insurance companies use a range of factors when assessing risk and arriving at different categories of insurance premiums. Penalty points are one such factor. The industry acknowledge the following criteria among their rating factor — age, gender, type of driving licence, claims experience, class of use, vehicle engine cc as well as other criteria. The Department understands that some motor insurers use penalty points as a specific rating factor, whereas others take a more general approach of acknowledging the effects of penalty points on the overall claims costs and price premiums accordingly.

The Government for its part initiated the Insurance Reform Programme in 2002 which has been very successful in bringing down the cost and increasing the availability of motor insurance. Between April 2003 and August 2006, overall motor insurance premiums have fallen by some 28.5 percent. The recommendations contained in the Motor Insurance Advisory Board's report form the bedrock of the insurance reform programme which my Department is implementing. The operation of the Personal Injuries Assessment Board and anti-fraud measures incorporated in the Courts and Civil Liability Act have already improved the environment for lower costs of claims resulting from personal injury claims and compensation. Random breath testing, increased resources to the Garda Traffic Corps and the roll-out of the penalty points system are also expected to deliver better driver behaviour and reduced frequency of traffic collisions.