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 Header Item Equal Status (Equality Proofing) (Amendment) Bill 2016: First Stage (Continued)
 Header Item Public Holidays (Lá na Poblachta) Bill 2016: First Stage
 Header Item Committee on Procedure: Appointment of Members
 Header Item Insurance Costs: Motion (Resumed) [Private Members]

Thursday, 9 June 2016

Dáil Éireann Debate
Vol. 912 No. 2

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An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Since this is a Private Members' Bill, Second Stage must, under Standing Orders, be taken in Private Members' time.

Deputy David Cullinane: Information on David Cullinane Zoom on David Cullinane I move: "That the Bill be taken in Private Members' time."

I thank the Ceann Comhairle for giving me the time to move this Bill today. It amends the existing legislation and aims to provide for equality-proofing of Government policy, budgets and public bodies through impact assessments. Its aim is to promote equality in the functioning of public bodies and to provide for the carrying out of equality impact assessments in respect of measures that are likely to have a significant impact or effect on equality of opportunity. The Bill will ensure both Government and public bodies exercise their functions in a way that is designed to reduce the inequalities of outcome that result from socioeconomic disadvantage. It is quite extensive. It puts a requirement on the State to carry out proper equality-proofed budgeting. We know from all the analysis from the ESRI that, budget after budget, income inequality has increased and poverty has increased. We want to get to a point where we know the impact of decisions at budget time and policies in terms of whether they will increase poverty. That is the thrust of the Bill.

  Question put and agreed to.

Public Holidays (Lá na Poblachta) Bill 2016: First Stage

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh I move:

That leave be granted to introduce a Bill entitled an Act to provide for the amendment of the Organisation of Working Time Act 1997 and establishment of a body to be known as Bord Lá na Poblachta and for related matters.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Is the Bill opposed?

Minister of State at the Department of the Taoiseach (Deputy Regina Doherty): Information on Regina Doherty Zoom on Regina Doherty No.

  Question put and agreed to.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Since this is a Private Members' Bill, Second Stage must, under Standing Orders, be taken in Private Members' time.

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh Tairgim: "Go dtógfar an Bille in am Comhaltaí Príobháideacha."

Given the major and seemingly insatiable public interest in the various 1916 commemorations which we have seen, organised throughout the country and abroad by local and national organisations, by parties and by the Government, it would be appropriate that we would designate a day annually as "Lá na Poblachta" on 24 April to honour the ideals of the Proclamation of the Irish Republic. Events would be organised on that day throughout the Thirty-two Counties and it would be designated a public holiday to help facilitate public participation in those events.

The acceptance of my Bill would also encourage the study of the Proclamation and the ideals contained within it and of citizenship. It would also mean helping and encouraging the study of that period as a whole. It would be appropriate, given the year we have had, that 24 April 1916 be remembered on this day, the day the Proclamation of the Irish Republic was read at the GPO 100 years ago.

  Question put and agreed to.

Committee on Procedure: Appointment of Members

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl The following Members have been appointed to the Committee on Procedure and Privileges, to be henceforth known as the Committee on Procedure: the Minister of State at the Department of the Taoiseach, Deputy Regina Doherty; and Deputies Thomas P. Broughan, Jim Daly, Seán Haughey, Mattie McGrath, Josepha Madigan, Denise Mitchell, Kevin Boxer Moran, Michael Moynihan, Aengus Ó Snodaigh, Eamon Ryan, Sean Sherlock, Brendan Smith and Bríd Smith.

Insurance Costs: Motion (Resumed) [Private Members]

The following motion was moved by Deputy Michael McGrath on Wednesday, 8 June 2015:

That Dáil Éireann:
is concerned that:

— consumers have been faced with an increase of over 60 per cent in the cost of their motor insurance since January 2014, with a 34 per cent increase in the last 12 months alone; and

— commercial users have also experienced large increases in their motor insurance premiums;

notes that:

— there is an obligation on the State to act when motor insurance premiums become unaffordable and put families and businesses under severe pressure;

— when the issue of industry profitability was previously examined by the Motor Insurance Advisory Board in the 1990s, it was found that the Irish insurance sector had profitability levels that were multiples of the United Kingdom;

— up to 80 per cent of personal injury claims lodged with the Injuries Board are not subsequently settled through them;

— greater transparency regarding the cost of settling claims or awards in personal injuries cases that do not go through the courts or the Injuries Board is needed; and

— a reduction in resources for the Garda Traffic Corps puts lives at unnecessary risk;

welcomes an emerging trend where cases of suspected insurance fraud are being successfully contested in the courts by insurers; and

calls for:

— the establishment of a task force along the lines of the successful Motor Insurance Advisory Board, which led to a considerable fall in insurance costs up to 2013:
— to tackle rising motor insurance premiums;

— review the role of the Injuries Board; and

— examine the reasons for the current turmoil in the insurance market;
— improved transparency of insurance industry profits and the establishment of a national claims register and a motor insurance database to record data across the sector;

— enhanced disclosure for consumers around policy renewal notifications including an obligation on insurers to inform customers of the change in their premium from the previous year;

— legislative reform to increase the penalties for false and exaggerated claims;

— greater clarity as to the respective roles of the Motor Insurance Bureau of Ireland and the Insurance Compensation Fund;

— a review of road traffic legislation to prevent the use of technicalities to avoid a conviction for motoring offences;

— improved regulatory oversight domestically and at European level, including the filling of vacancies in the Central Bank of Ireland Enforcement Directorate which deals with insurance firms; and

— action to protect low-income and vulnerable customers from unfair practices by insurance firms, including a refusal to quote for older cars which have a valid National Car Test (NCT) certificate.

Debate resumed on amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following:

“is concerned that:
- on average consumers have been faced with an increase of over 60 per cent in the cost of their motor insurance since January 2014, with a 34 per cent increase in the last 12 months alone but that in many cases consumers have received renewal quotes with prices that are multiple times their most recent premium;

- commercial users have also experienced large increases in their motor insurance premiums;

- the insurance industry investment and underwriting losses are directly leading to increased premiums for consumers;

- many young drivers and many people in rural areas reliant on private transport are effectively being forced off the road by unaffordable premiums; and

- the dramatic increase in premiums will lead to a greater number of uninsured drivers on our roads;
notes that:
- motor insurance is compulsory in the State yet not provided by the State;

- there is an obligation on the State to act when motor insurance premiums become unaffordable and put families and businesses under severe pressure;

- when the issue of industry profitability was previously examined by the Motor Insurance Advisory Board in the 1990s, it was found that the Irish insurance sector had profitability levels that were multiples of the United Kingdom;

- up to 80 per cent of personal injury claims lodged with the Injuries Board are not subsequently settled through them;

- greater transparency regarding the cost of settling claims or awards in personal injuries cases that do not go through the courts or the Injuries Board is needed;

- an update of the Book of Quantum is currently being undertaken; and

- a reduction in resources for the Garda Traffic Corps puts lives at unnecessary risk;
welcomes an emerging trend where cases of suspected insurance fraud are being successfully contested in the courts by insurers;

notes that the evidence available points to the failure of the investment policies of the insurance industry as the largest single cause of the dramatic increase rather than any legal or policy decision by the State or State bodies; and

calls for:
- the incoming Oireachtas Finance Committee to examine the reasons for the increase including through an examination of the business model underpinning motor insurance cover in the State;

- the immediate publication of the Department of Finance’s reviews of policy in the insurance sector when it is complete, or the publication of its work on motor insurance if completed earlier;

- a proposal from the Government for legislative action, including through the strengthening of the Financial Services Ombudsman to give greater protection and clarity to consumers in the sector and specifically to prevent consumers whose circumstances have not changed from facing increases completely out of line with industry average increases from year to year without any rationale being presented to them;

- the more timely and detailed publication of data on the performance of insurance companies by the Central Bank of Ireland and an examination of the use of the Central Statistics Office, or another suitable body, to provide independent and full data on the sector;

- a review of the Central Bank of Ireland’s regulation of the motor insurance sector over the past decade with a view to ascertaining if it, as regulator, has protected consumers and acted as necessary to maintain a sustainable motor insurance sector;

- the establishment of a task force along the lines of the successful Motor Insurance Advisory Board, which led to a considerable fall in insurance costs up to 2013:
 - to tackle rising motor insurance premiums;

- review the role of the Injuries Board; and

- examine the reasons for the current turmoil in the insurance market;
- improved transparency of insurance industry profits and the establishment of a national claims register and a motor insurance database to record data across the sector;

- enhanced disclosure for consumers around policy renewal notifications including an obligation on insurers to inform customers of the change in their premium from the previous year;

- legislative reform to increase the penalties for false and exaggerated claims;

- greater clarity as to the respective roles of the Motor Insurance Bureau of Ireland and the Insurance Compensation Fund;

- a review of road traffic legislation to prevent the use of technicalities to avoid a conviction for motoring offences;

- improved regulatory oversight domestically and at European level, including the filling of vacancies in the Central Bank of Ireland Enforcement Directorate which deals with insurance firms; and

- action to protect low-income and vulnerable customers from unfair practices by insurance firms, including a refusal to quote for older cars which have a valid National Car Test (NCT) certificate.”

- (Deputy Pearse Doherty)

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl I understand that Deputies Bríd Smith and Mick Barry were in possession and they have ten minutes remaining in this slot.

Deputy Bríd Smith: Information on Bríd Smith Zoom on Bríd Smith When I saw this I thought it was interesting that Fianna Fáil's first Private Members' motion was about the issue of motor insurance and was very much framed to present Fianna Fáil as the best friends in Ireland of the ordinary Joe and Josephine Soaps-----

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath Hear, hear.

Deputy Eugene Murphy: Information on Eugene Murphy Zoom on Eugene Murphy That is very true.

Deputy Bríd Smith: Information on Bríd Smith Zoom on Bríd Smith -----which is quite ironic given its record. The biggest cost in insurance premiums, at 60%, is the legal cost. If one looks at the role and the history of the Fianna Fáil Party in government and the previous Government of the Fine Gael Party and the Labour Party, none of them touched the legal profession. None of them went after the legal profession, even in the way the troika asked them to, which was through bringing down the legal costs in the country. That is probably one of the ring-fenced areas the troika did not go after and yet the ranks of both parties, particularly Fianna Fáil, are swollen with legal eagles of all sorts. I remember this being my experience on Dublin City Council in particular. The number of barristers and solicitors in that party who were also political representatives was quite astonishing.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath They were elected by the people.

Deputy Bríd Smith: Information on Bríd Smith Zoom on Bríd Smith We are talking today about an issue where legal costs represent 60% of the total cost of motor insurance, and despite this, the legal industry is the sector that is least touched in terms of this. Despite the portrayal by the industry of the real cause of the increase in cost being the young, fast-moving drivers who are fraudulent, who get whiplash at the drop of a hat and who are making all sorts of spurious claims, the real costs are much more hidden, in terms of both legal costs and profits.

When one looks at the profits of the big three insurance companies, it is quite interesting that they are not actually hurting all that badly. Aviva's profits were up by 38.5% in 2015. I know that includes all its profits, but nevertheless these are the profits of a company that insures everything from medical expenses to houses. It may well be hurting a wee bit on car insurance, but it is certainly making up for it elsewhere. In the same period, AXA Insurance made €76.9 million in profits and Allianz made €43.3 million. They claim their costs have increased, but their profits are certainly very healthy indeed. The Injuries Board shows a modest 8% increase in new claims in the 18 months to the middle of 2015. Some 70% of personal injury claims do not go to court, although there may be legal costs attached to them. The arguments of the industry that the claims are the problem do not really stack up and there is no real evidence to show it. The companies themselves have cited, among other reasons, a drop in investment income. In other words, they are investing money and profits in stocks and shares and the returns on these are dropping.

Advice received by the previous Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, from his own officials showed scepticism of the industry's claims about premiums rising because of compensation awards. They were very sceptical of these claims. The quote I would like to give Deputies from that advice is that from examining the evidence of awards it appears “motor insurers are now imposing higher premium rates to return themselves to profitability or to boost profitability after a number of years of insurers competing for market share, with prices driven down”. The officials also stated, “[t]he question does arise for motor insurers – if motor insurance is so unprofitable why does anybody do it?” We are constantly being told that competition is a healthy thing. It is supposed to be more efficient and it is supposed to improve the industry, but here is an example of the market ruling and making an absolute bags of an issue. It is making a bags of an issue where people are fundamentally legally required to have motor insurance but still the market does them nothing but disservice.

The only way we can improve this situation for the ordinary Joe and Josephine Soaps, who are so well got to the hearts of the Fianna Fáil Party, is to have a State-run, publicly owned and controlled and publicly accountable company that will insure people who are legally obliged to have insurance. We need a company that is not subject to the diktat of the market, trying to make a quick buck by investing in stocks and shares, but rather serving the needs of the people for medical and other cover when they require insurance. There will be a cavalcade of protesters on this issue - young, old, long, tall, medium and short, the ordinary Joe and Josephine Soaps from Cavan to Kerry - descending on this city on Saturday, 2 July. It will be a well-organised cavalcade to protest against the soaring cost of insurance. I hope most Deputies who genuinely have the interest of Joe and Josephine Soap at heart will be out to support that protest.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Deputy Barry has just over four minutes.

Deputy Mick Barry: Information on Mick Barry Zoom on Mick Barry I thank the Ceann Comhairle.

Yes, as through this world I've wandered

I've seen lots of funny men;

Some will rob you with a six-gun,

And some with a fountain pen.

Woody Guthrie might have been writing about the insurance industry in this country. Profits on car insurance were up 12% in 2014 and they were up 26.5% last year. According to Mr. Ken Thompson, the chief executive of Insurance Ireland, they will be up another 25% this year. My colleague, Deputy Smith, has quoted from the briefing document that was given by civil servants in the Department of Transport, Tourism and Sport to the previous Minister, Deputy Paschal Donohoe, last year.


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