Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

143. To ask the Minister for Finance if he is satisfied with the protocol agreed between an organisation (details supplied) and his Department; his views on whether policyholders should be provided with specific reasons as to why their particular insurance premium has increased; and if he will make a statement on the matter. [22339/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, in fulfilment of Recommendation 1 from the Report on the Cost of Motor Insurance, a protocol was agreed between Insurance Ireland and my Department which provides a list of reasons for large increases in motor insurance premiums. The content of the agreed document is available on the websites and the social media channels of the major motor insurance providers, and will also be provided to policyholders on renewal.

My Department is satisfied that the information being provided to policyholders fulfils the essence of the recommendation without a need for legislation to underpin it as had been originally stipulated in Action Point 2, which was formulated at a stage when it was envisaged that the document provided to policyholders would be bespoke in nature. It does not consider that it is necessary at this juncture to pursue legislation in respect of the non-bespoke protocol which has been agreed through non-legislative means but will continue to monitor how the protocol is functioning in practice.

In an ideal scenario, I believe policyholders should be furnished with the specific reason or reasons for an increase in their insurance premium. However, the main reason why such a bespoke document cannot be provided is because my Department has been advised that the complexity of the interaction between the customer-facing systems and the underwriting systems in all modern insurance companies would make it very difficult to delineate specific reasons for an individual premium increase. If insurers were to try and link these systems in order to address this issue, it would require very significant IT infrastructural changes at considerable cost, which would almost certainly in turn lead to higher premiums. In addition, the Working Group believes that such an onerous requirement could result in the unintended consequence of discouraging new entrants to the market. Nevertheless, as part of the protocol consumers will be provided with contact details of their insurance provider in order to enable them to receive more “tailored” information if they do not believe any of the listed reasons apply to their situation.

I am keen to improve the level of information provided to policyholders by seeking to have the previous year’s premium included in renewal documentation. My Department has discussed this matter with Insurance Ireland.  It also requested that this information be included in renewal documentation by means of a submission to a consultation which was undertaken by the Central Bank of Ireland – Consultation Paper 114: “Amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No. 74 of 2007)” – which is pursuant to Recommendations 2 and 3 from the Motor Report, and continues to engage with the Central Bank accordingly.

This is an issue which I will continue to keep under review.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

144. To ask the Minister for Finance when he expects recommendation No. 2 of the report on the cost of motor insurance to be fully completed; his views on whether insurance premiums should be broken down between mandatory and non-mandatory elements; and if he will make a statement on the matter. [22340/18]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

145. To ask the Minister for Finance when he expects recommendation No. 3 of the report on the cost of motor insurance to be fully completed; his views on whether the current renewal notification period should be extended from 15 days to 20 working days; and if he will make a statement on the matter. [22341/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 144 and 145 together.

The implementation of Recommendations 2 and 3 is being carried out by the Central Bank of Ireland. As Minister for Finance, I support the objective of the Recommendations which involve enhancing the information provided to consumers and improving their experience in taking out an insurance policy.

On 9 November 2017, the CBI published Consultation Paper 114 (CP114): “Amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No. 74 of 2007)”. The purpose of the consultation was to seek views from interested stakeholders on Recommendations 2 and 3. The proposals within the consultation included insurers providing additional information on the premium breakdown to consumers and extending the current renewal notification period, in respect of motor insurance, from 15 working days to 20 working days. The consultation further considered whether the extension of the renewal notification period should be broadened to include other classes of businesses that fall within S.I. No. 74 (e.g., accident and health, fire and other damage to property and general liability insurance).

Eight submissions were received by the Central Bank, including one from the Department of Finance seeking the inclusion of last year’s premium in the additional information being provided to policyholders.

I am informed by the Bank that an analysis of the submissions is being undertaken with continued consideration of potential amendments to S.I. No. 74. They have indicated that a further consultation may be warranted arising from the submissions. In that case, the Central Bank will aim to have any amendments that may be required to S.I. No. 74 completed by the end of the year. This potential delay is flagged in the monitoring dashboard of the 5th Update Report available on the website of the Department of Finance.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

146. To ask the Minister for Finance the tangible effort being made under recommendation No. 5 of the report on the cost of motor insurance since its publication; when he expects a fully functioning European insurance market to be up and running; and if he will make a statement on the matter. [22342/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. I would like to clarify at the outset that it is possible for an insurance undertaking authorised in one member state to conduct business in another EU/EEA state either through:

- establishing a branch operation in the host country and thus conducting business on a ‘freedom of establishment’ (FOE) basis; or

- writing business from the home country (i.e. where authorised) into the host country on a ‘freedom of services’ (FOS) basis.

In both situations the undertaking is required to meet certain obligations in the host member state, such as becoming a member of the national bureau and the national guarantee fund. These are important requirements as the Bureau is tasked with meeting the requirement of compensating victims of accidents caused by uninsured and unidentified vehicles.

Notwithstanding the extent of the existing framework, the Cost of Insurance Working Group heard from a number of stakeholders that there is room for further harmonisation in cross-border insurance. As the Working Group concluded however, this is a pan-European issue which will only be resolved at that level. In this regard, Recommendation 5 of the Report on the Cost of Motor Insurance recommended that the Department of Finance support efforts and raise awareness of this need to improve cross-border insurance at EU level. The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf. That Report outlines the implementation of this recommendation.

In this regard, the Department of Finance is monitoring developments at EU level on an ongoing basis and has instructed the Permanent Representation in Brussels to hold consultations with relevant institutions on issues raised in the report. I understand that officials in the Permanent Representation have been working on ensuring that the key messages from the Working Group’s report are understood by relevant EU officials in Brussels. However, work at EU level will very much depend on the priorities of the European Institutions, especially in the context of the ongoing negotiations with the UK as regard its exit from the EU.

I understand that the European Commission will shortly publish a revised Directive on Motor Insurance, subject to its approval. This proposal will likely cover a range of issues including the portability of claims history statements throughout the EU, possible guarantees towards victims in cases of insurer's insolvency, the scope of the Directive and the insurance of autonomous cars. All of these issues are relevant to the work of the Cost of Insurance Working Group and I welcome the fact that this proposal is due to be published soon.

Finally, an important point to note is that an insurer in considering whether it wants to take on Irish risk business will look at a wide range of factors including the award levels, the legal system, the general claims culture etc. Therefore ultimately, even if we do get a more efficient and accessible EU insurance market, there can be no guarantees that insurers in other jurisdictions will automatically be willing to take on Irish risk. 

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

147. To ask the Minister for Finance if he is satisfied that recommendation No. 6 of the report on the cost of motor insurance has been completed; if he is further satisfied with the situation in which returning emigrants can either be refused insurance or charged higher premiums; the specific legal impediments to enacting legislation that would prohibit discrimination against returning emigrants; and if he will make a statement on the matter. [22343/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, in fulfilment of Recommendation 6 from the Report on the Cost of Motor Insurance, a protocol was agreed between Insurance Ireland and the Department of Finance under which insurance companies have committed to accepting the driving experience returning emigrants gained while abroad, when the driver has had previous driving experience in Ireland. The guiding principle of the protocol is to ensure that a returning emigrant is not treated any differently to any other driver subject to their ability to demonstrate, and the insurance company to verify, continuous driving experience and the normal acceptance criteria of the company. What this means is that the returning emigrant will not be disadvantaged from spending time abroad. Furthermore, under the protocol, insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein or, indeed, whether the country is a member of the EU or not.

In addition to the above, insurance companies have agreed to provide relevant and helpful information on their websites to make it easier for consumers to understand the implications of their move abroad from a motor insurance perspective. As part of this exercise, they will outline what people need to do under a number of different circumstances depending on the length of time they intend being away from Ireland.

If a returning emigrant believes that they have received a high quote due to an insurance provider not accepting driving experience gained while abroad, they should contact the free Insurance Information Service operated by Insurance Ireland, which can be accessed atfeedback@insuranceireland.euor 01-6761820.

Ultimately, if a returning emigrant is unable to secure a motor insurance quotation on the open market, they may be in a position to avail of the Declined Cases Agreement (DCA) process, anddeclined@insuranceireland.euis the relevant e-mail address in this respect.

In relation to the implementation of Recommendation 6, Insurance Ireland submitted a report to the Department in December 2017. This report confirmed that Insurance Ireland members have agreed to publish the wording of the agreed protocol on their company websites and any other forms of social media, in addition to providing training for staff who can work through issues with emigrants before they leave, whilst they are out of the country and when they return to Ireland. The stated intention is “to resolve any issues well before they arise and for the consumer to be aware of the considerations when moving abroad”. The wording of the agreed protocol is also available on the Insurance Ireland website.

The Insurance Ireland report also outlined some sample cases which demonstrate how the rolling-out of the protocol has led to disputed cases being resolved to the benefit of returning emigrants, and provided figures indicating that the number of such cases being processed under the DCA is decreasing.

In conclusion, my Department is satisfied that the essence of the recommendation is being fulfilled without a need for legislation to underpin it. Moreover, I would be very cautious about going down such a route as in my role as Minister for Finance I cannot 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 the risks they are willing to accept.

You should note however that I will continue to monitor the implementation of this recommendation through my Department’s regular engagement with Insurance Ireland.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

148. To ask the Minister for Finance his views on whether policyholders should be informed of a claim made against them once that complaint has been lodged; his further views on whether recommendation No. 8 of the report on the cost of motor insurance can be legislated for; when he expects this recommendation to be completed in full; and if he will make a statement on the matter. [22344/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy will recall, Recommendation 8 from the Report on the Cost of Motor Insurance requires that a protocol be put in place around the requirement for insurance providers to notify a policyholder of claims made against them.

As Minister for Finance, I believe policyholders should of course be informed of a claim as soon as possible after it has been lodged. In addition, while accepting that an insurer has the ultimate right to settle a claim, I am also of the view that it should give appropriate consideration to policyholder’s views in the processing of any such claim. It is also important that a policyholder is informed as soon as a claim is settled.

As outlined recently in PQ 21879/18 regarding Recommendation 8, the Department believes that the substance of the Communication Guidelines for Insurers and Policyholders agreed between the IIF and IBEC in 2003 covers what is required to implement fully this recommendation. However, Insurance Ireland has argued that this recommendation is achieved through the application of the 2012 Consumer Protection Code and that the 2003 Guidelines have been superseded.

The Department is continuing to pursue the implementation of Recommendation 8, in parallel with a related recommendation from the Report on the Cost of Employer and Public Liability Insurance (Recommendation 10). Options are being considered as to the best course of action for bringing the recommendations forward, given industry’s diverging opinion on the matter.

Finally, I am not in a position at this juncture to state when Recommendation 8 of the Motor Report will be fully completed but the Deputy should note that the deadline for implementation of the related Recommendation 10 of the Report on the Cost of Employer and Public Liability Report is Q4 2018.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

149. To ask the Minister for Finance if he is satisfied that recommendation No. 10 of the report on the cost of motor insurance has been completed; the tangible steps which have been taken to address the issue of insurance for small public service vehicles, including insurance for taxis; and if he will make a statement on the matter. [22345/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the outset the Deputy should note that the Cost of Insurance Working Group’s starting position on insurance for small public service vehicles is that it was not possible for it to make a recommendation on pricing as this is primarily a commercial matter for insurers. It did however recognise that this sector serves a social as well as an economic purpose, particularly in rural areas where public transport is less readily available. This position was acknowledged by the inclusion of Recommendation 10 in the Report of the Cost of Insurance Working Group on the Cost of Motor Insurance. This recommended that the Advisory Committee on Small Public Service Vehicles should enter regular discussions with Insurance Ireland to explore solutions for drivers in the sector.

The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018:.That Report outlines the implementation of this recommendation.

In summary, Insurance Ireland met with the Advisory Committee on Small Public Service Vehicles, commonly known as the Taxi Advisory Committee (TAC), on 22 May 2017. The TAC submitted the required report in relation to this meeting on 21 June 2017 to the Minister for Transport, Tourism and Sport. To date, no further meetings have taken place between the TAC and Insurance Ireland. However, the TAC has advised my officials that it is keeping itself informed of developments in the area, particularly through the industry representatives on the Committee, and future meetings with Insurance Ireland are a part of the TAC strategy. Recommendation 10 has been completed in the sense that the TAC has reported to the Minister for Transport. Notwithstanding this, my view would be that work needs to continue on this general issue.  Therefore, I look forward to further engagements between the TAC and the insurance industry.

I would add that, notwithstanding the role of the TAC, the issues raised by the taxi sector were in the main similar to those affecting consumers generally, notwithstanding that there are risks that are specific to the sector. While there is no silver bullet to reduce the cost of insurance, I believe that cooperation and commitment between all parties can deliver fairer premiums for consumers, including taxi drivers. I note that the most recent CSO data (for April 2018) indicates that private motor insurance premiums have decreased by 19% since peaking in July 2016. While these statistics are not directly relevant to commercial vehicles, I do believe they signal greater stability in pricing on an overall basis and I am hopeful that the general downward direction in pricing will continue.

I also believe that the work of the Cost of Insurance Group should better facilitate potential new entrants to the market. In this regard, I have been informed by my officials that Insurance Ireland has stated that there has been some increase in market capacity in relation to the provision of motor insurance for taxi drivers recently.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

150. To ask the Minister for Finance if he is satisfied that recommendation No. 12 of the report on the cost of motor insurance has been completed; if his Department will use and report on data obtained independently of an organisation (details supplied); if independent analysts have been engaged on behalf of his Department rather than on behalf of the organisation; and if he will make a statement on the matter. [22346/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy will be aware that the Minister of State, with special responsibility for Financial Services and Insurance, Michael D'Arcy T.D., published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group) on 11 May 2018. The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database. The Report follows up on the first report, published in July 2017. It is likely that there will be at least one further report prior to the establishment of the National Claims Information Database.

By way of additional information on the production of these reports, a Sub-group of the Cost of Insurance Working Group, chaired by the Department of Finance, was established in January 2017 to implement this and other recommendations to improve data transparency. The Sub-group engaged extensively with Insurance Ireland who indicated that a number of the metrics identified in the Working Group’s Report were not available in a consistent fashion due to different definitions and different ways for reporting and recording data. Notwithstanding this, a data set was agreed and a data request was issued to Insurance Ireland in March 2017.

This request sought information in two tranches. The first tranche was received on 13 June 2017 and resulted in the publication of the first Motor Insurance Key Information Report in July 2017. In line with the complexity of the additional data being requested in the second tranche, it was agreed that Insurance Ireland would engage independent consultants - Verisk - to collect and compile the data in the case of this more complex data set. On 18 December 2017, a return, in the form of a report by Verisk outlining certain data and conclusions, was submitted to the Department by Insurance Ireland.

Subsequently, the Department and the Sub-group engaged with Insurance Ireland seeking some clarifications in relation to how the data and the conclusions presented were arrived at.

The Department, while accepting that the process to collate the data was rigorous, emphasises that any conclusions reached on the data are Verisk’s and have not been subject to any further actuarial analysis by it or the Central Bank, other than for clarifications. This is because, from a practical and cost perspective, the subgroup saw little to be gained from procuring a further independent actuarial analysis to verify the return, where it was satisfied that a robust process was evidenced by the detailed approach to the gathering of this data by Verisk. In addition, it should be noted that over the course of its work, the Sub-group took the view that the production of reports on a quarterly basis was not realistic in view of the complexity of the data exercise.

To conclude, while the recommendation is seen primarily as an interim step that increases the level of transparency in advance of the establishment of the National Claims Information Database, I believe that the series of reports are an important foundation stone as they have helped prepare industry for the new database. In addition, in view of the challenges in collating and analysing aggregate level data across the insurance sector in Ireland, this exercise strongly demonstrates the value and need for the National Claims Information Database. 

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

151. To ask the Minister for Finance when he expects recommendation No. 13 of the report on the cost of motor insurance to be completed; if he is satisfied that a claim-by-claim register can be set up; if the data sub-group has addressed the cost implications to the State, the potential barriers to entry issues and the data protection issues; and if he will make a statement on the matter. [22347/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Recommendation 13 of the Cost of Insurance Working Group recommended that the Department of Finance consider the feasibility of a longer term insurance claim-by-claim register. Two associated actions were recommended as part of this recommendation:

- To establish a sub-group to consider the feasibility of a longer term claim by claim register by Q1 of 2018, and

- To Report on the feasibility of a claim by claim register by Q3 2018.

The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018:.That Report outlines some of the progress to date on this recommendation.

In summary, in relation to the first action point, in Q1 of this year, the data sub-group, which was established to drive the implementation of each of the data related recommendations, commenced work on considering the feasibility of a longer term claim-by-claim register. It agreed a draft work plan and decided to undertake a consultation in Q2 with a view to seeking the views of stakeholders on the key considerations required when looking at the feasibility of a claim-by-claim register.

To that end, I launched a public consultation on 14 May 2018 and it is available on the Department of Finance’s website: . It will remain open until 22 June 2018.

The objective of this consultation is to seek the views of stakeholders, including insurance undertakings and intermediaries, consumers, other state bodies and interest groups, on what the added value of a claim-by-claim register would be in addition to the National Claims Information Database and the Insurance Fraud Database. The National Claims Information Database is currently being developed by the Department of Finance and the Central Bank of Ireland, and the Insurance Fraud Database is currently being developed by the Department of Justice.

In particular, I am keen to try and identify what form a claim-by-claim register could take, as there are a diverse range of views in relation to this matter, as well as a number of considerations which would need to be satisfactorily taken account of, including those which the Deputy mentions, namely data protection, cost and potential barriers to entry.

Following the consultation process, the data Sub-group will review the responses, meet with relevant stakeholders and carry out its own further research. Given the timeline and work plan that are in place, I expect that the Report on the feasibility of a claim by claim register will be available by the Q3 deadline set down in the Report.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

152. To ask the Minister for Finance if he is satisfied that recommendation No. 21 of the report on the cost of motor insurance has been completed as specified in the fifth progress update; when he expects to publish legislation under recommendation No. 21 of the report; when he envisages the legislation being enacted; and if he will make a statement on the matter. [22353/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Recommendation 21 of the Cost of Insurance Working Group Report calls for the Implementation of the Review of the Framework for Motor Insurance Compensation in Ireland.

The Deputy will be aware that the Fifth Progress Update, published earlier this month, provided an update on the implementation of this Recommendation stating that the Department of Finance is continuing to work with the Office of the Parliamentary Counsel to progress drafting of the Bill, which will implement 3 of the 4 key recommendations and which is expected to be finalised in May. It also noted that the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach has commenced pre-legislative scrutiny which it is hoped will be completed shortly.

The Deputy will also be aware of my decision in principle that the State will ensure that Setanta third party claimants are compensated in full, which was announced on 30 January and which had not been included in the recommendations of either the Review of the Framework for Motor Insurance Compensation in Ireland or the Cost of Insurance Working Group Report. The Department of Finance has received confirmation from the Office of the Attorney General that there are no state-aid or other legal issues with this decision, and has therefore proceeded with the detailed arrangements to implement it. An additional provision to give effect to this decision is being included in the Insurance (Amendment) Bill, which has now been finalised by my officials in liaison with the Office of Parliamentary Counsel and is expected to be brought to Government for approval to publish at the next available opportunity. Once this is done I look forward to working with the Deputy to bring this important legislative piece through the Houses of the Oireachtas.

Additionally, the recommendation that the provisions contained in section 78A of the Road Traffic Act 1961, requiring insurers to supply details to the Minister for Transport, Tourism and Sport, be amended to provide greater clarity on what is meant by the term "details", was implemented by section 30 of the Road Traffic Act 2016. This section has yet to be commenced.