Bernard Durkan (Kildare North, Fine Gael)
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Question 278: To ask the Minister for Public Expenditure and Reform the extent to which he has identified various forms of insurance cover affecting the State and/or its institutions as a means of achieving savings to the Exchequer; the extent to which group insurance policies can be utilised for this purpose; and if he will make a statement on the matter. [4070/12]

Brendan Howlin (Wexford, Labour)
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Under the general rule of State indemnity the State carries its own insurance , i.e. a commitment is made to protect against losses, should any loss or damage arise where the State was negligent. For the following areas of risk:

· Personal injury to employees of the State;

· Personal injury to third parties (the public)

· Third party property damage - including claims arising from road traffic collisions,

claims against the State are managed by the State Claims Agency (SCA), established under the National Treasury Management Agency (Amendment) Act, 2000. The SCA's remit covers personal injury and property damage claims against certain State authorities, including the State itself, Government Ministers, the Attorney General, health enterprises, the Commissioner of An Garda Síochána, prison governors, community and comprehensive schools and various other bodies.

Where this State indemnity applies, the relevant Authority does not purchase insurance for personal injury (employer's and public liability) and third party property damage and therefore, will not have to bear associated premium costs. Indemnity operates on a pay as you go basis so that all costs associated with personal injury and third party property damage claims will be paid directly from the budget of the relevant Authority through a reimbursement system operated by the SCA. Analysis has demonstrated that the cost to the State of dealing with claims directly is significantly lower than the premium cost of insuring the risk.

Since 2001 the remit of the SCA has been expanded through various delegation orders based on value for money analysis. For example, the remit of the Agency was extended in 2010 and again in 2011 to include personal injury (employees and members of the public) and third party property claims against the Health Service Executive (claims for alleged medical negligence had been delegated to the Agency in 2003) and 19 other State agencies. This has yielded significant annual savings as these organisations no longer have to pay insurance premiums for delegated classes of claims.

In order to maximize savings the State must manage the claims made against it at the best possible cost. For example during 2011 the SCA achieved significant savings on claims and related legal costs associated with the management of the Clinical Indemnity Scheme (CIS). An independent actuarial assessment projected that €106 million would be required to satisfy CIS claims and related costs in 2011. The outturn for the year was €81 million, representing a saving of €25 million.

The SCA directly, or through the Chief State Solicitor's Office or the National Procurement Office in the Office of Public Works provides insurance advice on Government contracts, licenses, schemes and tenders in circumstances where State indemnity applies or on insurances required where it does not apply. This ensures that the States liabilities are minimized in the most cost effective manner.