Tuesday, 28 July 2020
Department of Finance
Let me say at the outset that I am very much aware of the problems faced by many businesses in the leisure industry, in relation to the availability and affordability of public liability insurance. However, neither I, nor the Central Bank of Ireland, can direct the pricing of insurance products, and neither can we compel any insurer operating in the Irish market to provide cover to businesses, or community groups, as this is a commercial matter for insurers. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) 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. In addition, the Government has no direct influence over award levels, as awards are a matter for the Judiciary.
As the Deputy will appreciate, there is no single policy or legislative fix to remedy the cost and availability of insurance issue. What is needed is for the ongoing reform measures to be implemented and to quickly bear fruit. In this regard, the new Programme for Government identifies a range of issues that the Government will prioritise so as to benefit consumers including small businesses such as those in the leisure sector throughout the country. This cross-Departmental insurance reform agenda, which I believe builds and expands upon previous work done by the Cost of Insurance Working Group, is a priority for this Government and in particular for my Department.
In terms of addressing insurance premiums for small businesses, particularly those in the leisure sector, a necessary step is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. The establishment of the Judicial Council in December is very important in this regard, and it is expected that the Personal Injuries Guidelines Committee will submit draft Guidelines to the Judicial Council by 28 October. The guidelines could play a role in the lowering of award levels and also could lead to a more consistent application of awards by the courts. Insurance Ireland has commented that if award levels come down so will premiums charged by its members. I believe that this is a very important statement and the Government intends holding the insurance industry to account on this matter.
In conclusion, I wish to emphasise that insurance reform remains a priority for the Government and as noted above this is reflected in the Program for Government. This is an issue that I, as Minister for Finance, along with Minister of State Fleming in my Department, will focus on. In doing so we will be working closely with An Tanaiste and a number of other of our Ministerial colleagues given the cross-Departmental nature of prioritising the Programme for Government commitments on insurance reform.