Tuesday, 26 February 2019
Department of Finance
115. To ask the Minister for Finance if insurance companies will receive a guarantee that premiums will go down if a Garda insurance fraud unit is established; and if he will make a statement on the matter. [9654/19]
As the Deputy is aware, the Cost of Insurance Working Group (CIWG) proposed exploring the possibility that a specific unit, funded by the insurance industry, be established within An Garda Síochána to tackle insurance fraud. However, I have been informed that the Garda Commissioner has indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the exchequer for the purposes of tackling such matters. He has however indicated his willingness to continue to look at establishing an improved investigative capacity within the Garda National Economic Crime Bureau (GNECB) in the area of insurance fraud overall. The Deputy will, of course, appreciate that it is the Garda Commissioner who is responsible for the allocation of resources within An Garda Síochána and neither I nor the Minister for Justice and Equality has a role in such operational matters.
It is important to note that an industry-funded Garda unit was a single mechanism proposed as a potential means by which to implement the intent behind the relevant recommendation, the wording of which calls for An Garda Síochána to explore the potential for further cooperation between it and the insurance sector in relation to insurance fraud investigation. In this regard, much constructive engagement has taken place through the Fraud Roundtable, which was formed by the CIWG primarily to implement Recommendation 13 of the Report on the Cost of Employer and Public Liability Insurance, work which culminated in the publication by An Garda Síochána of the Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochánain October 2018. A particularly positive ‘spin-off’ development from the Roundtable has been that the GNECB and Insurance Ireland’s Anti-Fraud Forum – which is drawn from the fraud sections of the major individual insurers – have committed to meet on a regular basis in order to discuss and act upon current and ongoing general issues which arise in the area of insurance fraud.
In relation to the proposal that insurance companies provide (which it is presumed was the intended word in the Deputy’s question, instead of “receive”) a guarantee to reduce premium levels, I believe there is a need to be careful about requesting such commitments, particularly in the context of competition in the sector, as it may send a signal to other insurers about what pricing levels might be. This is particularly the case in the context of ongoing investigations into the insurance sector by both the European Commission and the Competition and Consumer Protection Commission.
However, the above said, I would expect that insurers’ pricing of premiums in general would take account of the measures which have been, and are being, implemented as a result of the CIWG recommendations more broadly and I believe that insurers themselves recognise this. In this regard, I would recall that Justice Nicholas Kearns, the Chairperson of the Personal Injuries Commission (PIC), noted in the foreword of its second report that insurance industry representatives on the PIC repeatedly stated that, as award levels and associated costs account for the bulk of the cost of insurance, if claims costs come down and are maintained at a consistent and predictable level, then premiums will also reduce accordingly.
Overall, it is envisaged that the full implementation of all the recommendations taken cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, can achieve the objectives of delivering fairer premiums for consumers and businesses, and a more stable and competitive insurance market.