Written answers

Wednesday, 23 October 2019

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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90. To ask the Minister for Finance the status of legislation to tackle the cost of insurance, particularly public liability insurance for businesses; and the sanctions that will be introduced as part of legislation for a person found to have brought forward a false or exaggerated claim. [43712/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I can assure the Deputy that insurance reform remains a priority for the Government.  The Cost of Insurance Working Group (CIWG), which was established in July 2016, has produced two reports, and is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report.  The most recent Update Report, the ninth, was published in July and shows that the vast majority of the CIWG recommendations have been implemented.  A key conclusion of the CIWG was that there was no single policy or legislative “silver bullet” to immediately address the problem of rapidly rising insurance premiums.  Instead, a broad series of initiatives are required to address this problem.

Consequently, the Government has brought forward a number of pieces of legislation, arising from recommendations of the Cost of Insurance Working Group.  These include the following:

- The Judicial Council Act 2019, which was enacted in July.  This is a key piece of legislation in the context of insurance reform.  It provides for the establishment of a Personal Injuries Guidelines Committee, which will introduce new guidelines to replace the Book of Quantum, following the formal establishment of the Judicial Council.  It is now matter for the Judiciary to put in place the Judicial Council and to operationalise the Personal Injuries Guidelines Committee.  While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly;

- The Central Bank (National Claims Information Database) Act 2018, which has established the National Claims Information Database in the Central Bank.  This will increase transparency around the future cost of private motor insurance.  The CBI is due to make its first report by the end of 2019, and will also make recommendations to me regarding potentially expanding its scope to include employer and public liability insurance;

- The Personal Injuries Assessment Board (Amendment) Act 2019, which makes important reforms to the Personal Injuries Assessment Board, by strengthening its powers around compliance with its procedures;

- The Insurance (Amendment) Act 2018 to reform the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance; and

- Amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected.  These were introduced through the Central Bank (National Claims Information Database) Act 2018.

I would also note that an important piece of work that may entail legislation in the future is the Law Reform Commission’s (LRC) work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform.  This work is well underway and I am hopeful that it will conclude in the second half of 2020.  This could in turn have a positive impact on the cost of insurance.

In relation to the Deputy’s question in respect of sanctions for false or exaggerated claims, I would note that the CIWG considered this issue during its consideration of employer and public liability insurance.  In particular, it reviewed the relevant sections of the Civil Liability and Courts Act 2004 (sections 25 and 26).  The CIWG noted that the number of recorded prosecutions and convictions for the offence of false evidence in section 25 is very low and that this suggested a need for further co-operation between the insurance industry and An Garda Síochána.  It also noted that while the majority of applications in respect of alleged fraudulent actions under section 26 were refused, it concluded that there was nothing fundamentally wrong with the provision.  It also commented that there was a need for defendants to more regularly challenge misleading evidence, where appropriate by taking it to court, rather than settling on the court steps for fear of an unsatisfactory outcome.

A number of other measures are being taken by way of ensuring that sections 25 and 26 can have their intended effect in relation to insurance fraud.  For example, the various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, are key to this.  The recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud also demonstrates the commitment by An Garda Síochána to tackle false or exaggerated claims, and I commend the Gardaí for their recent raids under Operation Coatee, which targets insurance-related criminality, in this regard.

As I think the Deputy will appreciate from these developments, a concerted policy approach is being taken with the support of the Cost of Insurance Working Group to address the issue of insurance fraud including as it impacts on small and medium enterprises and the broader business community. This is being done by means of a series of mutually reinforcing measures.  At the same time, they are intended, in their collective implementation, to give greater effect to the existing provisions of sections 25 and 26 of the Civil Liability and Courts Act 2004.

Finally, I believe all of the reforms mentioned above are already having a significant impact with regard to private motor insurance (CSO figures from September 2019 show that the price of motor insurance is now 24% lower than the July 2016 peak) and the Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.

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