Thursday, 26 November 2020
Department of Finance
120. To ask the Minister for Finance his plans to implement the recommendations made in the report by the working group on reducing the cost of motor insurance; and if he will make a statement on the matter. [39117/20]
141. To ask the Minister for Finance the status of the implementation of the recommendations made in the report by the working group on reducing the cost of motor insurance; the number of outstanding recommendations yet to be implemented; the reason for same; and if he will make a statement on the matter. [38316/20]
I propose to take Questions Nos. 120 and 141 together.
At the outset, I want to emphasise the key importance that Government places on the insurance reform agenda. This is reflected in the Programme for Government which identifies a range of issues that need to be tackled on a Whole-of-Government basis. This ambitious reform agenda is being led by the Cabinet Committee on Economic Recovery and Investment’s sub-Group on Insurance Reform. It is chaired by the Tánaiste, and includes Ministers McGrath, McEntee, O’Gorman, Ministers of State Troy and Fleming and myself as standing members. I strongly believe this cross-departmental approach provides the best opportunity to address the cost and availability of insurance and will build and upon previous commendable work done by the Cost of Insurance Working Group (CIWG) which produced two primary reports, the first on the cost of motor insurance and the second on the cost of employer and public liability insurance.
My Department published the CIWG’s Eleventh and Final Progress Update Report on 30 October. This illustrated that the vast majority of recommendations had been completed. It was also noted that taking account of the new Whole-of-Government approach, that the outstanding CIWG recommendations will now be implemented through the Cabinet Sub-Group on Insurance Reform. In that context, the four outstanding recommendations from the CIWG’s Motor Insurance report, including the reason for their delay, are as follows:
- Recommendation 16 – Ascertain and set out the measures necessary to implement Pre-Action Protocols (PAPs) for personal injury cases:The Department of Justice has advised that draft regulations on PAPs for medical negligence actions remain under discussion with the Office of the Parliamentary Counsel (OPC). It has advised that they intend to move this work forward as a matter of urgency. The finalisation of these Regulations will then inform the work on the PAPs for personal injuries actions.
- Recommendation 22 – Examine the impact of legal and other fees on personal injury awards:The implementation of this recommendation was contingent on the establishment of the Office of the Legal Costs Adjudicators (OLCA), as provided for under the Legal Services Regulation Act 2015. The OLCA came into operation with effect from 7 October 2019. The Department of Justice has outlined that a period of at least one to two years from the time this new body became operational will be required before they will have an appropriate data baseline to commence a meaningful review.
- Recommendation 24 – Examine the setting of the discount rate (in personal injury lump sum awards), without prejudice to the outcome of relevant proceedings, and to be reviewed at regular intervals:The Department of Justice recently ran a public consultation and will provide a report once its review of the discount rate has concluded in the context of the new reform agenda.
- Recommendation 25 – Establish a fully functioning integrated insurance fraud database for industry to detect patterns of fraud:This recommendation has been delayed as a result of a number of data protection issues. These are currently being examined by the Department of Justice and other stakeholders.
Notwithstanding these outstanding recommendations, the Deputy will be aware that many positive reforms have been introduced to address the cost and availability of insurance through the CIWG. These include legislation to: strengthen the role of PIAB; to clarify and widen the role of the Insurance Compensation Fund; to provide access to information regarding claims; to provide more information to consumers at renewal; and to make it easier for businesses to challenge fraudulent claims. The cumulative impact of these changes has undoubtedly been a factor in helping to reduce motor premiums over the last number of years. The most recent CSO data indicates that the cost of motor insurance is now almost a third lower than it was at its peak in July 2016.
In conclusion, the CIWG’s remaining recommendations will be part of the Cabinet Sub-group’s work. The Deputy can rest assured that seeking to secure sustainable competition through deepening and widening the supply of insurance in Ireland is a key priority issue for the new Government and that Minister of State Fleming and I will play a lead role to ensure that progress is made in this policy area.