Tuesday, 26 February 2019
Department of Finance
140. To ask the Minister for Finance the steps he is taking to help alleviate the cost of insurance for the leisure industry; and his views on whether insurance price rises within the sector have become highly inflated. [9652/19]
141. To ask the Minister for Finance if he is satisfied that progress is being made by the working group on the cost of insurance in the areas of public liability insurance such as for marts or child play centres. [9653/19]
I propose to take Questions Nos. 140 and 141 together.
At the outset I wish to emphasise that I am very aware of the financial strain which the cost of insurance is placing upon businesses in particular in the leisure and mart sectors.
As part of the Cost of Insurance Working Group’s (CIWG) formal consultation process, there was engagement between the CIWG and representatives from different industries, including both the agricultural and leisure sectors, while more recently, Minister of State D’Arcy, who chairs the CIWG, has met with representatives of those operating play centres. From these engagements, it would appear that the main difficulty in these sectors is a lack of capacity in the market which I understand has been driven to some degree by the overall claims level in these sectors.
In determining their willingness to enter into or remain in a particular sector of the market, insurers will generally make an assessment of what they consider the overall risk to be. Therefore, part of their assessment of what premium level to charge, or whether to offer cover will be based on what they consider the general likely trend for claims in the sector will be, based on their overall past experience.
The Deputy should note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation and neither I nor the Central Bank of Ireland can 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 an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Therefore I cannot compel insurers to provide cover to businesses such as play centres or marts.
The above said however, it was recognised with the establishment of the Cost of Insurance Working Group (CIWG) that the environment within which insurers conduct their business can be better shaped, in order to make the Irish insurance market a more competitive one and also make it more attractive for new entrants. In this regard, the initial focus of the Working Group was the issue of rising motor insurance premiums, and the Report on the Cost of Motor Insurance was published in January 2017.
The second phase of the CIWG, under the Chairmanship of the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy TD, culminated in the issuing of the Report on the Cost of Employer and Public Liability Insurance in January 2018. It makes 15 recommendations with 29 associated actions, detailed in an Action Plan with agreed timelines for implementation.
The most recent Progress Update was published last November and shows that 18 of the 19 actions points in the Employer/Public Liability Report arising up to end of Q3 2018 have been completed.
It is envisaged that the next quarterly Progress Update will issue by the end of this month and I understand that the vast majority of the total of 26 action points which were due for completion during 2018 overall have been done. I am confident that any outstanding action points will be completed in the coming months, along with the three remaining action points with deadlines set for various quarters throughout 2019.
The actions implemented to date cut across a number of different areas and include:
- The publication of by An Garda Síochána of the “Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána”
- The Law Reform Commission confirming that the subject of caps on damages for personal injuries litigation is included in its draft Fifth Programme of Law Reform
- Sections 8 & 14 of the Civil Liability and Courts Act 2004 have been amended to ensure defendants are appropriately notified of a claim having been submitted against their policy and to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected, respectively
- An Garda Síochána commencing the collection of statistics under the new “insurance fraud” category which has been added to the PULSE system
- The Courts Service confirming that they will publish a more detailed breakdown of awards in personal injury cases in its Annual Reports.
Finally, I would like to assure the Deputy that the CIWG will continue to focus on implementing the recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance. In particular, there will be an emphasis on implementing the recommendations of the second Personal Injury Commission Report in order to try and bring the levels of damages awarded in this country more in line with those awarded in other jurisdictions.
I am hopeful that the cumulative effects of the implementation of the two Reports’ recommendations will result in a more competitive insurance market and thus increased stability in the pricing of insurance for businesses in the leisure sector including play centres as well as sectors such as marts.