Minister D’Arcy welcomes publication of the Cost of Insurance Working Group’s Ninth Progress Update

The Minister for Financial Services and Insurance, Michael D’Arcy has today (Friday) welcomed the publication of the Working Group’s Ninth Progress Update. This marks the first biannual update from the Cost of Insurance Working Group, the previous updates having been on a quarterly basis. On an overall basis, Minister of State D’Arcy believes that the position in relation to the implementation both of the Working Group’s Report’s is positive.

In relation to the implementation of the Motor Report, 31 of the 33 recommendations, or 69 of the 71 actions, have either been completed, are categorised as “ongoing”, or have been concluded. These reforms are having a significant impact with regard to private motor insurance with CSO figures from June 2019 indicating that the price of motor insurance is now 24.5% lower than the July 2016 peak.

While good progress has also been made on the implementation of the Employer/Public Liability Report (13 of the 14 recommendations, 27 of the 28 actions due by the end of Q2 2019 have been completed, are “ongoing” or completed), the Minister of State acknowledges that the cost of insurance remains an issue for small businesses and voluntary groups, and in this context, the passing by the Oireachtas of the Judicial Council Bill on 9 July, marks an important moment.

There has been significant work over the last 6 months in implementing the recommendations of the two reports including the following:

the passing of the Judicial Council Bill by the Oireachtas on 9 July in order to implement the recommendation of the Personal Injuries Commission regarding award levels in this country, including a judicial recalibration of the existing Book of Quantum guidelines;
the establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance;
reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019;
commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
the Law Reform Commission (LRC) has commenced its 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; and
various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as 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, and the recent success under Operation Coatee, which targets insurance-related criminality.

In addition, the Department of Justice and Equality submitted its report on impact of court jurisdictional limits to the CIWG on 5 June 2019. This report is being published with this Update Report.

Minister of State D’Arcy said

“Much progress has been made, in particular with regard to motor insurance, however I acknowledge that there is still much work to do particularly in relation to the cost and availability of insurance for small businesses, and voluntary/community groups.

I am of the view that the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. In order to implement the Personal Injuries Commission’s recommendations related to the future Judicial Council being tasked with developing new Personal Injuries Guidelines, the Government made amendments to the Judicial Council Bill to facilitate such a process. I have worked closely with the Minister for Justice and Equality, Mr Charlie Flanagan TD to progress the Bill through the Houses of the Oireachtas as a matter of priority. I am therefore pleased that the Bill has been passed by both Houses of the Oireachtas on 9 July, and I expect it will be signed into law by the President shortly.

Now that the Bill has been passed, it will be a matter for the Judiciary to put in place the Judicial Council and to establish 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 by targeting an end of year completion date for an initial set of guidelines, which take account of the PIC’s benchmarking report. I acknowledge that this may be an ambitious timeline but I believe that because of the urgency of the situation, every effort should be made to try and achieve this objective. I am hopeful that the creation of personal injury damage guidelines by the Judiciary can result in the lowering of award levels. If this were to happen, I would expect the insurance industry to take account of such reductions in its pricing”.

ENDS

Further information from:

Aidan Murphy, Press Officer, Department of Finance - 085 886 6667

pressoffice@finance.gov.ie

Note to Editors:

The Cost of Insurance Working Group, chaired by Minister of State for Financial Services and Insurance, Mr Michael D’Arcy T.D., was established in 2016 and is comprised of representatives from the Department of Finance, the Department of Business, Enterprise and Innovation, the Department of Justice and Equality, the Central Bank of Ireland, the State Claims Agency, and the Personal Injuries Assessment Board. It has produced two reports since its establishment. These are:

The Report on the Cost of Motor Insurance was published in January 2017 and made 33 recommendations with 71 associated actions to be carried out in an agreed timeframe, and
The Report on the Cost of Employer and Public Liability Insurance was published in January 2018 and made 15 recommendations with 29 associated actions to be carried out in an agreed timeframe.

There is a commitment in both Reports that the Working Group will prepare regular updates on its progress. Updates have been published on quarterly basis since 2017, and from 2019 will be published on a biannual basis. All Updates provided details on how the implementation of the recommendations were progressing, with a particular focus on the action points which were due for completion during the respective period covered.

The last of the deadlines in the Action Plan of the Motor Report passed at the end of 2018, while all but one of the deadlines in the Action Plan of the EL&PL Report have now passed. Of the 33 recommendations in the Motor Report, 31 have either been completed, are categorised as “ongoing” and in respect of which work is continuing, or have been concluded in so far as the direct involvement of the Cost of Insurance Working Group is concerned. Of the 14 recommendations due by Q2 2019 in the EL&PL Report, 13 have either been completed, are categorised as “ongoing” and in respect of which work is continuing, or have been concluded in so far as the direct involvement of the Cost of Insurance Working Group is concerned.

This Progress Update also includes an update on the implementation of the recommendations of the Personal Injuries Commission Reports.