Written answers

Wednesday, 15 September 2021

Department of Enterprise, Trade and Employment

Insurance Industry

Photo of Kieran O'DonnellKieran O'Donnell (Limerick City, Fine Gael)
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79. To ask the Minister for Enterprise, Trade and Employment the status of the work to reform insurance with a view to reducing the cost on individual consumers and businesses; and if he will make a statement on the matter. [43811/21]

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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Government wants a competitive, stable and consumer-friendly insurance environment. To deliver on insurance reform Government established a Cabinet Committee Subgroup on insurance reform which is chaired by the Tánaiste and of which I am a member. The subgroup published the Action Plan for Insurance Reform in December 2020 which sets out actions across Government that will be taken to reform the insurance market. This is one of the most important programmes of reform that this Government will undertake. Implementation of the Plan is on track with the first six-monthly Implementation Report published in July 2021, showing that work is progressing well to implement the Action Plan, with 34 of the 66 actions completed.

Among the actions completed are the introduction of the Personal Injuries Guidelines which came into effect on the 24th April. These Guidelines apply to all cases assessed by PIAB from that date. Preliminary PIAB data indicates that since the implementation of the Guidelines, the average PIAB award has decreased by approximately 50%. Furthermore, about 80% of PIAB awards are now €15,000 or less, compared to 30% in 2020. The new Guidelines clearly represent a significant shift in the manner in which general damages are awarded in our country and in the level of those damages and should exert downward pressure on insurance costs.

The Criminal Justice (Perjury and Related Offences) Act 2021 was signed into law in June 2021 and commenced on 28 July 2021. The legislation provides a clear definition of perjury and should enable the offence and related offences to be more easily prosecuted in the courts. The establishment of the Insurance Fraud Coordination Office under the Garda National Economic Crime Bureau is also a welcome development. Both will act as effective deterrents to assist in tackling fraudulent claims.

An Office to Promote Competition in the Insurance Market has been established within the Department of Finance, chaired by Minister of State Fleming and supported by my Department. The work of the Office includes engaging with sectoral stakeholders to understand gaps in the insurance market, with a view to expanding the risk appetite of existing insurers. It is also involved in exploring opportunities for new entrants in order to increase the availability of insurance. This Office provides a coordinated Government policy approach to increasing competition in the insurance sector.

As Minister of State for Trade Promotion, Digital and Company Regulation, I have met regularly with PIAB and a range of representative bodies to assess the role of PIAB and develop proposals to enhance and reform the agency. Heads of a Bill have been developed in consultation with PIAB, which I am considering. I am also progressing legislation to strengthen competition law in Ireland. The legislation will break new ground in this area, giving competition authorities, such as the Competition and Consumer Protection Commission (CCPC), enhanced powers including administrative sanctions and other tools in dealing with anti-competitive practices.

The scope of the National Claims Information Database has been widened to cover Employer Liability and Public Liability with a first report published by the Central Bank in July.

While progress on these actions is welcome, Government is committed to doing more to reduce insurance costs. The Minister for Justice is considering legislative proposals to reform the law in the area of occupier’s liability. Under the Action Plan, the Department of Justice is working on several actions in the area of fraud. We will also enhance the National Claims Information Database. Ministers and I have met regularly with stakeholders to understand the issues they face and to inform our policy making process. This engagement will continue as we deliver meaningful reform of the insurance sector.

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