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Private Members' Business. - Insurance Costs: Motion (Resumed).

Wednesday, 6 February 2002

Dáil Éireann Debate
Vol. 547 No. 4

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The following motion was moved by Deputy Rabbitte on Tuesday, 5 February 2002:

That Dáil Éireann is acutely concerned at the escalating costs of insurance which have been exacerbated by the collapse of Independent Insurance and the effects of 11 September 2001 and the consequent threat posed to employment;

–aware that it has become virtually impossible for young drivers to get reasonably priced insurance cover;

–notes the growing difficulty in some sectors in securing employers and public liability insurance;

–notes the spiralling increase in employers and public liability insurance which averaged 42% last year and is forecast to average between 48%-55% for this year;

–notes that some small companies have gone out of business because of failure to secure insurance cover;

[1519]–deplores Government failure to take any significant action in this area over the last four and a half years or more recently to respond to the implications of 11 September 2001 or the collapse of Independent Insurance;

–believes that Government inaction will result in further job losses;

–notes the escalating cost of motor insurance generally and the hugely punitive cost of insurance for young drivers in particular;

–deplores the ongoing delay in introducing the long promised penalty points system for road offences more than three years after it was recommended in the national strategy on road safety;

–deplores the failure of the Government to tackle exorbitant legal costs or to establish the personal injuries tribunal;

–regrets the Government's failure last year to publish as promised the findings of the Motor Insurance Advisory Board;

–regrets the slow pace of modernisation of the courts, including the full development and implementation of “case management” and the adequate resourcing of the Courts Service to ensure efficiency and speed of trial and real, effective access to justice;

–calls on the Government to develop alternative dispute resolution mechanisms and real access to justice;

–demands that the general insurance market be subjected to a thorough investigation by the Competition Authority; and

–calls on the Tánaiste and Minister for Enterprise, Trade and Employment to enable the Equality Authority in the matter of motor insurance to conduct a statutory inquiry into allegations of discriminatory practices based on age or gender using its powers to require the production of documents and attendance of witnesses.

Debate resumed on amendment No. 1:

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

“fully recognises that the major determinant of the price of insurance in Ireland, is the high cost of settling claims.

Having regard to:

–the existence of the tort system for deciding levels of compensation;

–the proportion of the cost of claims accounted for by legal costs;

–the cyclical nature of the insurance market;

–the implications of the collapse of Independent Insurance Company Limited (United Kingdom) on 17 June 2001;

[1520]–the serious implications of the events of 11 September in the United States for the global insurance industry, particularly the increased cost of re-insurance;

–the fact that there have been no failures of insurance companies here in Ireland since 1984;

–commends the policy of the Government, to provide a wide choice of insurance cover, at the most competitive price available, by pursuing a policy of encouraging as much competition as possible on the Irish market, including from other EU insurers;

–commends the initiatives taken by both the Tánaiste and the Minister of State with responsibility for science, technology and commerce in establishing the Motor Insurance Advisory Board and the implementation group charged with progressing the establishment of the personal injuries assessment board;

–recognises the importance of the work undertaken by both the implementation group and the advisory board and awaits with interest their imminent reports;

–notes that the national road safety strategy has resulted in a decline in the numbers of accidents and fatalities, against a background of greatly increasing numbers of motor vehicles;

–notes the enhanced activities of the Health and Safety Authority and the declining numbers of accidents in the workplace over a period, where the numbers employed, have greatly increased;

–notes that the Government considers that further reductions in fatalities and accidents are achievable;

–commends the Government's proposed reforms in the Road Traffic Bill that are designed to further reduce road traffic accidents, and the initiatives planned by the Health and Safety Authority and the workplace safety group to effect further reductions in accidents in the workplace; and

–commends the Government on all of its efforts to date to ensure adequate, sustainable and reasonable cover for all insurance consumers.

–(Minister of State at the Department of

Enterprise, Trade and Employment,

Deputy Treacy).

Mr. Flanagan: I have to be very critical of the Government in relation to insurance costs. Its approach can best be described as hands-off. Business, commerce and consumers continue to take a massive hit, with insurance premium increases of up to 100% across a wide range, including employers liability, public liability and [1521] motor cover. The Government and the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, in particular, are long on promises, but short on action. In contrast, on behalf of Fine Gael, I wish to introduce a ten point plan to address the situation.

Allegations have been made of a cartel and closed shop in the insurance industry for many years. These allegations will remain in the public domain until fully rebutted. The Tánaiste should request the Competition Authority to carry out a study under section 11 of the Competition Act, 1991, of competition issues surrounding the insurance industry.

We should have a vigorous schools campaign on health and safety in the workplace and road safety. The high cost of claims is directly related to the high number of road accidents and accidents in the workplace. Appropriate education and training are essential to reduce the number of accidents giving rise to motor, employers liability and public liability claims. In terms of legislation, the new Road Traffic Bill promised on many occasions still remains to be enacted. We need a penalty points system which will deter habitual and continuous offenders from dangerous driving and speeding.

The Insurance Ombudsman should be independent and equipped with proper resources to investigate thoroughly complaints of overpricing and make sure that insurance companies are not deliberately pricing themselves out of particular sections of the market. A personal injuries compensation board should be established to assess damages without the need for court actions. I compliment Deputy Rabbitte for his efforts while Minister of State at the Department of Enterprise, Trade and Employment in putting together the nuts and bolts of such a board. Since he left office in 1997 nothing has emerged from the other side, despite the fact that Deputy Rabbitte had done the bulk of the work.

In relation to road traffic and law enforcement, road safety is of great importance. Greater emphasis must be placed on road safety investment. Garda resources must be channelled into road safety education and training. Improved arrangements for driver training, testing and licensing should be undertaken. Action should be taken to reduce the level of uninsured driving which is adding considerably to insurance costs.

The Director of Consumer Affairs should be empowered to address high interest rates charged by insurance companies on motor and liability insurance premia for small business which are paid on an instalment basis. Court procedure should be reformed and streamlined. Where cases do not go before the personal injuries assessment board, but have to go to court for reasons of liability, there should be strict guidelines in order that there is greater consistency on the part of the Judiciary in relation to awards of damages. Action must be taken to minimise lengthy court delays.

[1522]The Motor Insurance Advisory Board should be maintained on a permanent basis, with sufficient resources. A code of rights should be developed for all motor insurance policyholders as a measure to improve consumer protection and information. This would be granted to each insured person with his or her insurance policy. I ask for action along the lines I have outlined and commend the Labour Party motion which has the support of Fine Gael.

Mr. M. Kitt: Information on Michael P. Kitt Zoom on Michael P. Kitt I welcome the opportunity to contribute to this debate. I am glad the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Noel Treacy, established the Motor Insurance Advisory Board back in 1998. I hope this board will address issues in relation to young drivers. It should look at the relationship between the premiums charged to each category of driver and the corresponding claims experience. It is scandalous that so few companies are quoting for young drivers, with the result that there is great discrimination. Insurance companies frequently refer to the high risk factor among young drivers, but do not reward careful young drivers. Such drivers who have not made claims should get a reduction in premiums at the end of each year.

Although there is provision for payment of insurance premiums by instalments, very few drivers are told about this and very little information is provided by the insurance companies. I know of insurance companies in Scotland where young drivers can pay £40 per month in instalments, or less than £500 per year. That is a very welcome development. Due to lack of competition in this country, we are not getting the benefits of that system, nor are we getting the benefit of being a member of the European Union.

Various political parties have suggested the provision of education courses on the rules of the road and driver courtesy before a person would be allowed to take a driving test. This should be promoted and has long been the policy of my party. Many schools now have a very successful transition year in which such courses could be provided. Now that there is a written examination as part of the driving test, education courses would fit in very well in that context.

The Minister of State at the Department of the Environment and Local Government, Deputy Molloy, referred to the decline in the number of accidents and fatalities, against a background of an increase in the number of vehicles on the road. He posed the question, as we all do, as to the reason premiums have increased. I am sure it is possible to reduce further the number of accidents and fatalities which should lead to a reduction in the cost of motor insurance. The question has never been answered adequately by the insurance companies.

I wish to refer to another issue in relation to young drivers. I have received reports of people getting reduced premiums by telephoning the right insurance company, only to be told later [1523] that if they wish to add on a young driver, they cannot do so. Those issues should be spelled out clearly by the insurance companies concerned. Despite the abolition of juries and the reduction in legal representation, there is still no reduction in insurance premiums. It is ironic that, although young people are assisted in relation to housing through the first-time buyer's grant, we do not seem to have done anything for first-time drivers. I hope there will be an investigation as to the reason people with a good driving record cannot get reduced premia.

The Minister referred to the failure of Independent Insurance Company Limited in the United Kingdom. The fact that it got into difficulties has had a big influence on the situation in Ireland and been a big blow to Irish motorists. The events of 11 September in the United States have also had an effect.

I hope the establishment of the personal injuries assessment board and the workplace safety group will help to avoid a continuing increase in insurance costs and that, in fact, there will be a reduction.

Mr. Callely: Information on Ivor Callely Zoom on Ivor Callely I wish to preface my remarks by paying compliment to the committee, which I chair, on the work it has done with regard to motor insurance. A number of those who have contributed to the debate are members of the committee, which has done an extraordinary amount of research and work. It will, I hope, be in a position to complete its work in the coming weeks or months.

I wish to follow up on a comment made by Deputy Michael Kitt by highlighting, as I have done in the past, my admiration for young drivers for the responsible manner in which they go about their business and the mature way they appoint one of their number as a designated driver when they go out for the evening. There are many in the House who may in the past have gone out for the evening and driven their car home. Young people do not do this, they are very responsible individuals. I would like additional supports to be put in place for them.

Deputy Kitt also referred to transition year students. There is an eminent female with vast experience of driving who has made a number of proposals, one of which involves practical measures to be put in place for young people. When one turns 17 years of age one is entitled for apply for a provisional licence and take one's theory test. It would be extremely beneficial if we provided practical driving education courses for transition year students. I have initiated discussions with the insurance industry and understand funds will be made available to put such a scheme in place.

The high level of liability insurance costs, including motor insurance costs, has been an issue of deep concern to me for many years. It is generally recognised that these costs are higher in Ireland than in other EU countries. In recent [1524] years a good deal of pressure has been exerted for some radical action to be taken to address this serious matter. Successive Governments have had opportunities to take such action, but have failed to do so.

The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, has given considerable attention to the initiation of policies and programmes aimed at reducing the burden of insurance costs on the economy in general and small businesses and consumers in particular. In devising effective policies and programmes to reduce the insurance cost burden it is necessary to identify the key factors contributing to the high cost of liability and motor insurance in Ireland. Research undertaken on behalf of the Department of Enterprise, Trade and Employment indicates that the main cost factors are: a high level of claims among members of the public; high delivery costs, including legal costs, of personal injury claims; high levels of medical inflation; and high awards of general damages in smaller personal injury claims. All these costs have a bearing on the insurance premium rates ultimately charged in the marketplace. While good risks will always attract cheaper quotations, prudent insurers must set their premium levels to match compensation pay-out and other costs.

Successive Governments have sought to contain the rising cost of insurance premiums, while recognising that, for prudential reasons, insurers must be free to set their premium rates based on their claims experience in order to ensure the projected level of future claim costs can be met. The Department of Enterprise, Trade and Employment's examination of these factors contributing to the relatively high level of insurance costs in Ireland has been focusing on a number of key cost elements, including the level of personal injury compensation and the costs associated with settling compensation claims. The current system of compensation for personal injury in Ireland is grounded in the law of tort which entitles the individual to seek adequate monetary compensation for losses suffered as a result of damage to person or property, caused by the acts of another, and for pain and suffering.

A great deal of progress has been made following the 1996 Deloitte and Touche report and that of the Fair Trade Commission. However, the research commissioned by the special working group indicates that whereas 52% of personal injury cases in Ireland are settled in the Law Library, the same percentage of cases in England are settled through correspondence between the claims handler and the plaintiff's solicitor. It also shows that in Ireland junior counsel is appointed in 57% of cases, while senior counsel is appointed in 18% of cases. By comparison, in England junior counsel is appointed in 3% of cases and senior counsel is rarely, if ever, appointed. This has a huge bearing on legal costs and compensation pay-outs.

[1525]Mr. McGuinness: Information on John McGuinness Zoom on John McGuinness With the advent of the European Union and the breakdown of the market within it, people in Ireland had great expectations that insurance premiums – be they motor, property, PL or EL – would be reduced and that the continued increase in the cost of premiums would be halted. However, the development of the market within the European Union has led to amalgamations and takeovers and there has been little reduction in the level of premiums. It appears there is a cartel in operation in the marketplace, in which a smaller number of players are now operating. As a result, it seems the level of premiums can generally be controlled.

I accept that Ireland is not a “nanny” state. Fine Gael and other Members made the argument that the Government should intervene in this area. However, that cannot be done. Everyone in the House and those outside who have been obliged to take out insurance of one kind or another realise that the commercial world is a cold place in which to operate. Those who deal in stocks, shares and bonds take no prisoners.

Since 1970 various political parties have highlighted the fact that young drivers are being penalised and obliged to pay excessive premiums. Every year there has been an expectation that premiums would be reduced on foot of Government intervention, but nothing of the sort has happened. In fact, the opposite has been the case. A 21 year old blocklayer from my constituency, a responsible young man, bought a car for £4,000 in order that he could drive to work and was obliged to pay £3,200 in insurance.

If we are to make an impact in this area, the Joint Committee on Enterprise and Small Business should be allowed to take up this issue and develop a model – perhaps based on one used in another European country – that would suit the needs of people in Ireland and have real effect in the marketplace in terms of reducing premiums. This year, for example, Irish Public Bodies Mutual Insurance, which provides insurance for local authorities, has increased its premiums by up to 50%. The result is that the number of projects being undertaken by local authorities must be reduced. These were introduced after the Estimates were adopted and, as a result, the ones we hoped would be carried out at county level will now be affected. It is, therefore, in the interests of everyone in the House – regardless of their politics – to sit down together and arrive at a position where we can begin to have an understanding with the insurance companies.

Our interaction with insurance companies at committee level was anything but productive. We presented or found one set of figures, while the industry's representatives came forward with a different set and a different explanation. It is not good enough that they should treat a committee of the House in the way they did, particularly in the light of its efforts to try to bring about some form of understanding of what is happening in the marketplace in order that, in turn, we can perhaps [1526] bring about some changes that would impact on the huge insurance premiums people are obliged to pay.

I could make an argument in respect of the world of commerce and the way in which insurance costs are affecting business. The collapse of Independent Insurance in England affected Irish businesses. The Government, the Opposition and everyone involved in politics are going to be obliged to engage in serious consideration of this matter, particularly if we are to make an impact in terms of reducing the cost of premiums. The only way to ensure they are reduced and that this national scandal is brought to a halt is to work, in a deliberate manner, with those involved in the industry.

Mr. B. O'Keeffe: Information on Batt O'Keeffe Zoom on Batt O'Keeffe The cost of motor and public liability insurance this year is a matter of major concern to everyone. It obviously affects the ability of some small businesses to pay premiums and at the same time remain viable.

We all share concerns at the premiums being charged, particularly to young people. This year, in particular, saw dramatic increases of 18% in the motor car insurance industry. In public liability insurance it has been a whopping 40%. There are businesses which are finding it extremely difficult to actually get any cover. This week I had somebody who has a roofing business in touch with me. He told me that getting cover was very difficult and that in the end the premium he was charged was more than 50% up.

The insurance business has always been cyclical to the extent that on some occasions companies were able to make a profit. Currently, however, the market for insurance is very depressed. The events of 11 September have had a dramatic effect on the overall issue of insurance and claims are of enormous proportions. We are talking about claims amounting to $115 billion. Many of the insurance companies which will have to pay out have an international standing. There will, therefore, be no great reprieve in terms of premiums for the immediate future.

One must ask what the Government has done, whether it has been active or inactive. Are the criticisms being levelled at the Government solid or political? In fairness to the Government, it has been very much to the forefront. The Minister for the Environment and Local Government, Deputy Dempsey, and the Minister of State, Deputy Molloy, have tackled head on the issue of the carnage on our roads. They have introduced the points system and are looking seriously at how penalties can be introduced that are commensurate with and take into account the devastating impact it is having.

At the same time has there been a reduction in the number killed on the roads from 478 in 1990 to something like 415 in the year 2000. The carnage is of massive proportions, but few people take into account that the number of registered vehicles on the roads has grown from over one million in 1990 to 1.68 million in the year 2000. [1527] Obviously, the levels are still far too high. However, there is clear evidence that these have been reduced and it is hoped that the Road Traffic Bill and the reforms, including improved enforcement, that are part and parcel of it will have a major impact.

We are all concerned about the cost of claims. The insurance companies have adverted to this issue time and again. I am delighted that Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, has established an advisory board to examine this issue. I understand it must report within one month. On top of this the PIAB was established and its report is due. Instead of sitting back the Government has been very proactive. This motion is political in the extreme in that were its movers to wait for one further month at least two major reports would be available to give us a foretaste of how we might set models for insurance in the future, whether for motor vehicles or public liability.

Mr. Kirk: Information on Seamus Kirk Zoom on Seamus Kirk I am glad to have the opportunity to make a short contribution to this most important debate. There are few public representatives who are not regularly contacted by constituents who are affected by the high premiums being charged for motor, public liability and employers liability insurance. The cost of fire cover has also become a problem, particularly in County Louth.

I particularly wanted to hear the contribution of Deputy Pat Rabbitte on this subject. As somebody who had been a Minister of State with responsibility for the insurance industry, I felt he would have reasonable insight into the problems within the industry. While there is no doubt his analysis of the overall position was very good – this is not intended as a personal or political criticism – I hoped he would sum up his contribution by telling the House, on the basis of his experience, what measures needed to be taken to pull down the high cost of premiums and ensure businesses which are being saddled with excessive public and employers liability insurance costs can survive. There is no doubt that many businesses are under serious threat because of excessive premiums. I was somewhat disappointed that he did not deal with this aspect of the problem because I am sure he would have some very worthwhile suggestions to make.

My perspective is political because County Louth is one of the counties where people experience loading on most premiums. There are two national primary routes running through the county and, unfortunately, the accident and mortality rate is very high. We also have many young drivers on the road. All this is reflected in very high motor insurance premiums. When a premium of £5,000 or £6,000 is being demanded from a young driver and he or she needs a vehicle to get to work, quite clearly the whole question of whether it is worth his or her while travelling to work is debatable. The Department has spent many hours and days working on this. I hope the [1528] formula needed to tackle the problem will be found. We need it urgently in view of the serious and detrimental effects on the economy of high motor, public liability and employers liability insurance premiums. There are serious implications in the short and long-term and unless something is done about it, there will be serious job losses here and there.

Some time ago in a debate on local radio I suggested fitting speed control units to cars, which insurance companies could take special account of and reflect in the level of premium demanded from young drivers. I was quite surprised that a Garda spokesman rejected it out of hand as a possible solution to the problem. There is no doubt that speed and drink driving are major contributory factors to the high accident rate which, in turn, affects the high cost of compensation. I am sorry I have such a limited amount of time to deal with a subject that requires at least an hour.

Cecilia Keaveney: Information on Cecilia Keaveney Zoom on Cecilia Keaveney I am delighted to have even this brief opportunity to speak on this most important issue. I should declare my interest, given that I am one of the very many people in the country affected by the cost of insurance, particularly motor insurance. There are few households that are not very aware of the increasing premiums inflicted on us every time we receive our policy renewal forms. No matter how much older I get, and no matter how much older my car gets, it never seems to have a positive effect on the price of my insurance cover. When I was 18 or 19, I thought it would be cheaper when I was 21. When I got to 21 that target had increased to 25 and when I reached the age of 25, it had gone up to 30. When I reach the age of 35, I hope it will be cheaper.

When I lived and worked in England and in Northern Ireland, despite being younger, my premium was never as high as when I was insured here. Because my current insurance runs until September, I have considerable time to anticipate just how the 11 September attacks will hit me in the pocket as the international re-insurance market's capacity to cover its losses since then has been impaired. I know of other young drivers facing huge bills. It is important to realise that a car is not a luxury item in rural areas; it is a basic necessity for access to work, education and for life in general. Whatever about the big picture and the impact of 11 September, an event over which we have no control, I would be very disillusioned if I thought that no effort was being made to address the matter by the Government.

In this regard, I welcome the measures contained in Government policy, particularly in respect of encouraging as much competition as possible in the Irish market, including from other EU insurers. The barriers that exist must be looked at and addressed. Without competition, we can only have a monopoly and that monopoly will insist on maintaining the status quo in favour of the insurance company and not the insured consumer.

[1529]I welcome the establishment of the Motor Insurance Advisory Board, and the implementation group that is charged with progressing the establishment of the Personal Injuries Assessment Board, because it is accepted that the high cost of settling claims is a major factor in the cost of insurance. As the Minister outlined last night, it is amazing that the cost of delivery of personal injury compensation now runs at up to 40% of the cost of the claim itself. Addressing this issue must have huge implications for the consumer. I already had parliamentary questions down for written answer this week on this topic and I look forward to the imminent report of the implementation group and the advisory board. I recognise that in debates such as this it is easy to try to pre-empt what such reports will say. Surely, if a body has been given a job to do, we must await its expert opinion. While I have ideas that I would like considered in respect of, for example, ringfencing VRT moneys to assist young drivers, particularly for their first years' insurance, or some other such initiative, this is to make suggestions in a vacuum until such time as the report and its recommendations are available for us to read and react to.

Ultimately, a reduction in accidents would give less credence to the arguments that are presented by the industry, which provides statistics that are regularly challenged. The Government, through the national road safety strategy, is making an impact resulting in a decline in the number of accidents and fatalities. This is in the context of a very high number of vehicles on the road.

The media blitz of very stark advertisements has had a positive impact. There is a role also for educational media advertisements on the subject of showing courtesy on the roads, be it in the context of slow-moving vehicles pulling in to the slow lane where one is provided, the proper use of roundabouts etc. A very useful example that I saw in Spain was the provision of access for primary school children to a small playground where they could go about with their scooters and bicycles to learn the rules of the road. These playgrounds are very useful, with traffic lights, roundabouts, lanes and various road signs which are fun resources that could be easily supplied in most towns.

It is wrong that a person who has had their car stolen is under a three to five-year penalty from the insurance industry for something they had no hand, act or part in, and it is wrong that people cannot get a quote from most companies without a three-year no claims bonus. More competition may help. The penalty points system may produce more careful drivers but there are huge issues for many, particularly young, people, the vast majority of whom have not had an accident but who cannot get any recognition for the safe manner in which they drive.

I wish the Minister well in his co-operation with the group that has been set up. Cars are used in my constituency as a necessity not as a luxury. It makes more sense to have insured drivers than to [1530] have people driving without insurance and risking the lives of all who are legally on the road. I wish the Government success in implementing the recommendations of the pending report and I want to see them enacted as soon as possible.

Mr. Wall: Information on Jack Wall Zoom on Jack Wall I wish to share my time with Deputies Ryan, Upton, Gilmore and Broughan, by agreement. My colleague, Deputy Rabbitte, made an eloquent and trenchant speech to the House yesterday on the Labour Party motion on insurance costs. I congratulate him for his most decisive contribution on this issue. It is a sorry situation when the Tánaiste seems to be the last person in Ireland to appreciate the problems which ordinary people up and down the country have in relation to the increasingly prohibitive costs of insurance. I cannot believe that the Minster for Enterprise, Trade and Employment is taking a hands-off approach to an important economic activity which has a vital bearing on the daily lives of people and many small businesses in pursuit of a right-wing economic agenda. The Minister can run at the election, when it eventually comes in a few months time, but she cannot hide from the many people who have been adversely affected by the circumstances prevailing in getting insurance on cars, public liability insurance or other forms of business and personal insurance.

While the Tánaiste is travelling around the country in State cars, she may lose sight of the simple facts that confront the ordinary motorist when insurance premiums fall due for renewal. My insurance recently went up from €500 to €700. Deputy Keaveney mentioned the age factor and that when one gets older, car insurance premiums come down. I have to disappoint her and say that such is not the case. The premium will increase as one's age increases. In my case, the increase was 40% despite having a full no claims bonus and despite my insurance broker trying everything to get a better deal.

My predicament is similar to that of many other people this year. All premiums have gone up but at least I was able to get cover for my car. However, the position of people under 25 years of age, most of whom find it impossible to get affordable cover, is outrageous and totally unacceptable. Deputy Rabbitte has exposed the myths and fallacies surrounding the excessive levels of car insurance premiums that younger motorists have to pay. Responsibility for this rests squarely with the Government which has let this situation evolve without any intervention or control, and has been only effective in concocting meaningless explanations in official speak in an attempt to justify its procrastination and inaction on this issue.

We in public life sometimes wonder why young people do not take more of an interest in politics. I urge the younger generation to take an interest in this issue and to analyse a situation where they find it impossible to get car insurance cover. In many cases, this coverage is needed by younger [1531] people to get to work, particularly in rural constituencies such as my own. I will be surprised if, after an objective analysis, young people do not come to the only logical conclusion – that politicians, and especially the Government, have proved utterly ineffective in dealing with the matter.

I meet people every week who are involved in local, mainly voluntary, activities in rural areas and who find it impossible to get public liability insurance cover on halls, community centres and other places of public assembly. This has major implications for the fabric of life in rural areas. In my own area, a local group had a community centre and if they were to use it for the purpose for which it was built – to accommodate a drama group – they would have to pay an extra premium. It is possible to have bingo sessions a couple of nights per week by levying a charge on the players or if the local community provides a revenue source to subsidise other activities such as drama. However, there are only so many bingo nights that can be supported by any locality. In practice, the prohibitive level of insurance cover for local centres means that the only activities that can take place in them are those that are financially self-sufficient. Functions for less well-off groups such as OAPs can be forgotten. It is a sorry day when the voluntary sector can only assist in activities that are financially viable and self-sufficient. This cuts across long-established traditions of helping the less well-off sections of our communities to participate fully in the life of their areas.

A few months before the end of this Dáil there are calls for the Government to take constructive steps to address the insurance difficulties which many people have had during the lifetime of this coalition. The Government is unwilling or unable to take any action beyond pulling electoral strokes directed at marginal constituencies.

Despite those considerations, I urge the House to support the Labour Party's motion calling on the Government to take the basic steps necessary to reform the framework under which the insurance industry operates and to provide some comfort and, more importantly, some justice to the long-suffering public who have had to put up with Government inertia and inaction on this issue over the past five years.

Mr. S. Ryan: Information on Seán Ryan Zoom on Seán Ryan I am pleased to have the opportunity to speak on this important motion. I commend Deputy Rabbitte for bringing it before the House – it is not before time.

The major issue for young people in recent years has been their inability to obtain reasonably priced motor insurance cover. Today I spoke to a young man who depends on his car to get to work. He was quoted €4,500 for comprehensive cover. He is fortunate that he has a good job and is able to afford this cost – but only at the expense of his social life. Another poor person told me that it cost him more than €1,000 per annum to secure third party cover as a named [1532] driver of his mother's car. A young girl informed me recently that the cost of her insurance cover was infinitely greater than the value of her car. I could give example after example but it is sufficient to say that this is a scandalous situation that has been allowed to escalate over the past four and a half years.

This Government has failed or has been unwilling to take on the vested interests in the insurance business. While I accept that young, male drivers have a disproportionately bad record in terms of safety, there are hundreds of thousands of responsible young drivers who face discrimination on a daily basis. The loading practice on those under 25 must be challenged and that is a task for this House but the Government has failed to do it. In this motion the Labour Party calls on the Minister for Enterprise, Trade and Employment to allow the Equality Authority to conduct a statutory inquiry into allegations of discrimination on the grounds of age and gender in the motor insurance industry.

Members on all sides of the House wonder why many young people do not vote. One of the main reasons is that they do not see this Parliament as relevant to their needs and think it does not listen to them. This issue should have been dealt with. It was a prime example of an opportunity to address an issue that affects young people but it appears the Government and the Taoiseach, who prides himself on being in touch with young people, have no interest in dealing with the spiralling costs of insurance for young motorists. The Government has not delivered after nearly five years in office and that is a scandal.

Young people are being victimised and discriminated against by the incompetence of this Government and the unwillingness of the Minister for Enterprise, Trade and Employment to take on the vested interests in the insurance industry. She has failed to open it up to competition so young motorists might have more choice. There is a more limited choice of quotations available for young drivers and those over retirement age than for those over 25 and under 70 according to a report of the Motor Insurance Advisory Board.

The report goes on to state that young policy holders, who pay the highest rates, produce larger surpluses over claim costs than most of those aged 25 years and over. How does the Minister of State take on board the critical views in this report? What is he prepared to do to meet the legitimate needs of young people?

Many of those young people I represent need to get to work and that is why they own a car. This Government has failed to provide public transport or to challenge the costs of insurance cover for young drivers. Young people will answer them come the election, which I hope will be sooner rather than later.

Mr. Gilmore: Information on Eamon Gilmore Zoom on Eamon Gilmore I support the motion tabled by Deputy Rabbitte yesterday to bring to the attention of this House the serious problem that exists [1533] with regard to insurance and its implications for business, employment and young drivers.

I have been contacted by many businesses in my constituency pointing out the serious problems they face. I have a letter from a retail business that reads, “I have built up my business over the last 30 years and I employ 25 people. This situation cannot be allowed to continue and proper investigation into these exorbitant premiums will have to be carried out. I ask you as my local representative to make urgent representations to remedy the situation before it is too late and we are forced out of business.”.

I have another letter from a firm of accountants representing a number of businesses which details the serious concerns of its clients about their ability to continue to trade. One client company has decided to cease trading. The firm says the potential loss of employment and the risk to indigenous business is a worry. A letter from another business in my constituency states that it is clear the current situation is not sustainable and that we must develop a system of employers' and public liability insurance which is efficient, effective and, above all, equitable.

I talked today to the owner of a car rental business who pointed out that his premiums had increased by 60% this year alone. The insurance premium now amounts to half the cost of renting a car. He told me that two substantial car rental businesses have gone out of business in the last 18 months as a result of car insurance premium hikes, representing 10% of the car rental fleet in the State. If this situation is not addressed, the entire car rental business is at serious risk and that will have consequences for the tourism industry.

I support my colleagues in what they have said about premiums for young drivers. It is scandalous that young drivers, whose taxes are contributing to the operation of the State, are being fleeced by insurance companies for premiums calculated on an unfair basis. I challenge the Minister of State to say why he has refused to provide the necessary funds for the Equality Authority to enable it undertake an investigation into the complaint brought to its attention by my colleague, Deputy Rabbitte, who asked that the situation regarding insurance for young drivers be investigated also.

Dr. Upton: I welcome the opportunity to contribute to this debate. The problem of rising insurance costs is one which I and I am sure most Members must deal with on a daily basis. Several aspects of the Government's failure to deal with spiralling insurance costs have already been addressed, especially by Deputy Rabbitte.

I wish to address the issue of the soaring cost of insurance cover for schools around the country. Yesterday on “Morning Ireland” George O'Callaghan of the Joint Managerial Board said the cost of insurance for schools has increased by up to 25% in the past 12 months. This is an appalling financial burden to be endured by already hard [1534] pressed schools. In recent weeks my party leader, Deputy Quinn, and I have visited several schools in disadvantaged parts of my constituency. We saw at first hand the immense financial pressure they are already under without having to endure 25% increases in insurance costs.

Does the Government have any proposals to deal with this escalating crisis? Given its casual and stand-off attitude over the past five years, I will not hold my breath. If the Government, even in its dying days, does not take action to lessen the insurance bills for schools, there will be a return to the situation where parents and pupils must raise funds. Is it happy to allow a drift towards this? The problem is that the most disadvantaged will again suffer the most.

Other speakers have referred to the effect on young people of the rising cost of insurance for motor vehicles. For too long Governments have used insurance costs as a means by which to keep young drivers off our roads. We are all agreed that the number of accidents and road fatalities are highest among the 17 to 25 year age group. Sadly, my constituency has experienced this tragic phenomenon all too often in recent times. However, there are numerous other means by which young people who are speeding or found to be drinking and driving can be discouraged from doing so. To penalise them financially through high insurance costs can be a deterrent, but to penalise all young people because of the misdemeanours of a few of their peers is neither acceptable nor fair.

The cost of insuring a car for a young person is now almost always greater than the value of the car. Many of my constituents work outside the public transport catchment area of Dublin and have no choice but to use a car to get to work. These responsible young people are penalised because they need a car to earn a living in an area not served by public transport.

Like my colleagues, I have recently received a number of letters from small businesses which have outlined the sharp increases in the cost of insurance, especially in 2001. The outcome is the probability that a number of them will be put out of business.

Mr. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan Like every Deputy, I have in recent months received dozens of e-mails and telephone calls from companies and constituents about the crazy cost of insurance in this country and the wide suspicion that we have suffered an even bigger rip-off since 11 September. The last e-mail I received today, at approximately 5.30 p.m., states:

Good afternoon. I think it is a complete disgrace the price of insurance for young drivers. Are the Government going to do anything about this? I have been looking for a quote for my 20 year old brother and the cheapest he can get is €4,400. This is twice the value of his car. How can insurance companies justify this? I tried to get insurance from X, Y and Z company and the difference between male and [1535] female with the same details is unbelievable, almost €2,500 extra for a male.

What I want to know is this. Is the Government going to do anything about it? It has got to the stage that your no claims bonus does not count anymore because each year insurance costs go up at least 20%.

That is typical of the kind of e-mail we have all received. It is a situation that causes great distress. The Government will be held to account for this in the forthcoming general election.

Like many Deputies, I am a director of perhaps five or six community development and employment support bodies throughout the north-side communities. I was shocked at board meetings last year, especially since last September, when we had to deal with increases of between 60% and 80% in insurance premia for employers and public liability cover. There was not much shopping around because in the limited Irish market and with the experience of the collapse of the Independent Insurance Company these were the best figures we could get.

One of the worst aspects of this situation is that a significant part of the vital funding these groups would have put together in what are often deprived communities for small enterprises, child care, personal development and to support the unemployed and their families has had to be diverted to ensure people can walk safely through buildings. In some instances insurance premiums amount to £20,000. It is a very significant problem. As it happens, local government, the State and the taxpayer must often pick up the tab for these increases because funding is often taken from the limited moneys provided by groups such as FÁS, the voluntary programmes run under the aegis of the Department of Social, Community and Family Affairs and various other bodies or local authorities.

While we all recognise the significance of the impact of the events of the 11 September and the collapse of the Independent Insurance Company, the Minister of State, Deputy Treacy, and the Minister must take a heavy responsibility for what has happened to the cost of insurance in this country. The Minister of State is a pleasant and avuncular colleague, but for five years he sat on the progress made by Deputy Rabbitte on personal injuries and other areas just before the rainbow coalition Government left office. Five years later he has made entertaining speeches, such as one I heard two years ago, but has taken no action. In a few months the next Government will have to pick up the pieces.

Mr. Healy: Information on Seamus Healy Zoom on Seamus Healy I wish to share my time with Deputy Ó Caoláin. The Government must legislate to solve the motor insurance situation, especially the rip-off on young drivers who are subject to a huge injustice. The current cost of their motor insurance is unjustified, intolerable and unsustainable. The vested interests main[1536] taining the huge premiums involved must be tackled by the Government.

At a recent meeting of young drivers in my constituency a young driver told me his first motor insurance policy cost £4,017 and that after a year of safe driving it increased to £4,070. In the following year, after passing his driving test and with two full years no claims bonus, it was still at £3,500. Another driver told me that with a full licence after two years he got what he regarded as an exceptionally good quote of £1,300, but ten days later, when he went to accept it, it had increased to £2,600. Many young drivers in my constituency need transport to take up employment or attend further education. These huge insurance premiums act as a disincentive to both.

Caoimhghín Ó Caoláin: Information on Caoimhghín Ó Caoláin Zoom on Caoimhghín Ó Caoláin I support the motion and urge the Government to drop its amendment and implement the measures proposed. Drivers, especially young people, are being fleeced by the insurance industry. Last year the National Youth Council of Ireland published a report aptly entitled, The Plunder Years, which showed the blatant profiteering that discriminates against them. For example, the council found that a 24 year old male driver with a full licence for two years and a no claims bonus was quoted £2,213 to insure a 1998 Fiat Punto. I have also received the same representation quoted by Deputy Broughan.

Many young people are now forced to pay insurance premiums by instalment, thus incurring a further 18.6% interest. In my constituency of Cavan-Monaghan public transport is minimal and there is almost total dependence on the car. Young people are doubly disadvantaged through lack of public transport and punitive car insurance.

The reality is that young people are being forced off the roads. Only 6% of them drive compared to 14% in the European Union as a whole. This is a form of economic and social discrimination as well as acting as a break on the economy. The lack of access to a vehicle can exclude candidates from jobs where driving is required and can prevent people from taking jobs at locations not served by public transport.

The Government should intervene directly now. It is time it took on the ruthless profiteering of the insurance companies and act on behalf of young drivers.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt): Information on Tom Kitt Zoom on Tom Kitt I am conscious from exchanges I have witnessed here between my colleague the Minister of State, Deputy Treacy, and Deputy Rabbitte of how difficult it is to tackle this complex issue of insurance costs. I acknowledge that both Ministers have put a great deal of work into this area. As one who shares a Department with my colleague I appreciate this is not an easy nut to crack.

[1537]Mr. Gilmore: Information on Eamon Gilmore Zoom on Eamon Gilmore The Government had long enough to do it.

Mr. T. Kitt: Information on Tom Kitt Zoom on Tom Kitt It is a tough one as the Deputy's colleague, sitting beside him, will acknowledge. Having said that, the Deputy has a right to raise these issues which need to be debated. I hope this debate will help to advance the cause of finding solutions.

There are a number of reasons, international and domestic, for the sharp increase in insurance premiums. That is the situation we forecast. Others have stated it is a cyclical business. We are entering a phase where prices are increasing. Re-insurers, in particular, have borne the brunt of the costs of the events in New York in September last and have had to increase rates to compensate. Certain types of cover, especially terrorist cover, are no longer available because of the increased risk and the lack of capacity in the international insurance market. Re-insurers have accordingly reconsidered the cover they are prepared to underwrite and have introduced restrictions.

The net effect for those purchasing insurance is that the cost of insurance cover has increased dramatically and availability of cover has contracted. In addition to the effect of the insurance cycle and the events in the US, there are domestic factors to be taken into account. Two High Court judgments on how to calculate future losses and on re-imbursement of hospital costs by insurers have the potential to increase awards in personal injury cases. Insurers will have to review reserves with a view to strengthening them in outstanding cases. In addition, in relation to property insurance a succession of three bad winters has led to increased claims experience. There is little the Government can do to influence these factors. We are well aware of the difficulties that increased insurance costs create for businesses and individuals. Insurers have agreed to discuss with their clients ways of minimising risk or moderating cover so that increases can be kept to the minimum necessary. It is worth remembering that insurance costs are high in Ireland because compared with continental EU member states we pay more compensation through the insurance system than through the health or social welfare systems. This is one of the reasons we have lower employment costs in Ireland than in most EU countries.

The factor in insurance costs that the Government is addressing is the reduction in the delivery cost of compensation which can account for as much as 40% of the cost of settling a claim. The implementation group which is considering the establishment of the personal injuries assessment board is proceeding with its work on the various complex aspects of this task and the Minister of State, Deputy Treacy, expects to receive the final report in the next month or so.

The work of the Motor Insurance Advisory Board, re-appointed by the Minister, should assist us in understanding the relationship between the cost of claims for certain categories of policyho[1538] lders, especially young drivers, and the premiums they are charged. The transparency afforded by the work of the board will in itself be useful perhaps in encouraging new players on to the market.

On the rates charged to young drivers, the Motor Insurance Advisory Board will establish the facts of the relationship between claims costs for this segment of drivers and the premium rates charged. That in itself will influence pricing on the market. I welcome the special initiative designed by some companies to offer insurance to young people prepared to accept certain constraints or conditions at favourable rates. While I acknowledge that these schemes are fairly restricted at present, if young people are a better risk than we thought up to now, such schemes may become more common throughout the country.

We have made good progress in reducing the incidence of accidents both on the roads and in the work place and a number of Deputies have acknowledged this. In the area of labour affairs, for which I have responsibility, I welcome the fact that, while one accident is one too many, according to an IBEC survey published in March there has been a reduction in the number of accidents in the workplace. They have fallen by as much as 21% from 1999 to 2001. That is as a result of the strengthening of the Health and Safety Authority which has been given more resources and more personnel. We have adopted many initiatives with regard to a partnership approach to make the workplace safer. In the coming months and years there will be a focus on the small and medium sized businesses. Therefore, there have been some useful developments in those areas.

The Personal Injuries Assessment Board will make a substantial contribution to reducing the cost of claims by reducing the need for legal involvement in settling personal injury claims. Since the cost of legal involvement may well account for €800 million in the total cost of claims settlement at present, the savings that may be achieved by the Personal Injuries Assessment Board are considerable.

I will address some of the issues raised during the course of the debate. Because the Motor Insurance Advisory Board has paid particular attention to the problems of young drivers – an issue that has been rightly referred to by many Deputies – the board's report should make clear whether the premiums being charged to young people are justified by their claims experience. The Government will consider what action is appropriate in the light of those findings. However, I caution against the idea of subsidising motor insurance for young people. That suggestion has been put forward by Fine Gael in particular. Experience shows that where subsidies are paid, prices adjust to take account of the subsidy. Moreover, international research indicates that where the cost of insurance is uncoupled from the cost of claims, the incidence of accidents increases. Research in the US and Canada, where no fault systems have been put in place, indicate [1539] a rising rate of accidents related to the date of introduction of the “no fault” system.

On the issue of discrimination or alleged discrimination a remedy is available. Young people who believe they are being discriminated against may bring a case to the Equality Authority. While individual complaints to that authority are dealt with in privacy, I understand from newspaper reports that some complaints have been brought already.

The Government believes the investigation conducted by the Motor Insurance Advisory Board will be sufficient to elucidate the issues raised in this House concerning motor insurance. When that report has been published and considered further studies may be unnecessary.

The Government is addressing the issue of the cost of insurance in a substantive way that addresses those underlying causes of high insurance costs that can be dealt with. The Motor Insurance Advisory Board will provide us with the underlying facts relating to motor insurance. The Personal Injuries Assessment Board will reduce a significant cost element in the price of insurance, namely the delivery costs. The Government welcomes the implicit support for the Personal Injuries Assessment Board from the House.

Mr. Quinn: Information on Ruairí Quinn Zoom on Ruairí Quinn I wish to share my time with colleague, Deputy Rabbitte, who will close the debate on behalf of the Labour Party.

I have listened with a mixture of sadness and bemusement at the measured and elegant contribution read into the record by the Minister of State, Deputy Kitt. I do not honestly believe he believes a word of it. After five years I can imagine what he would have said had he stood on this side of the House. After five years I can hear the ranting of his colleague the Minister of State, Deputy Treacy, had he been here for the past five years and witnessed the disintegration of the insurance market.

I am amazed but not surprised that the Tánaiste and Minister for Enterprise, Trade and Employment – listen to those three words, Enterprise, Trade and Employment – the leader of the Progressive Democrats Party, that party that believes in the god of the market, has refused to come in here and attempt to explain why she has presided over market failure that has become intense over the past five years. I do not recall employers coming to us with the scale of complaint or with the frequency that is reported to us by individual Deputies. That is on the record of the House. I recall employers in the early 1990s complaining about the cost of public liability insurance and I recall efforts being made to try to address those problems. Much progress was made in the Department. That progress was continued by Deputy Rabbitte when he was a Minister of State, as referred to by the Minister of State, Deputy Kitt. Why has not greater progress been made?

[1540]The amendment tabled by the Government is incredible. Why has there not been more progress in relation to the various working bodies? What has the Tánaiste been doing to try to get these reports and the deliberations of the various working parties brought to a conclusion? Can one assume that the incoming president of the Progressive Democrats Party, whose return is akin to that of the jedi in “Star Wars,” is so bemused by the sanctity of the Law Library, the integrity of the legal profession and the absolute inviolability of legal costs that we will get no further than a reference to them in the amendment and that no attempt will be made to do anything about them?

This litany of suggestions and proposals without any executive action from the Government is mind-boggling. Listening to the Minister of State one would think he was on this side of the House or, worse still, some kind of spectator commenting on the situation and regretting how bad it was. He should, instead, make concrete proposals which would deal with some of the issues before us.

Mr. Flanagan: Information on Charles Flanagan Zoom on Charles Flanagan If Deputy Quinn thinks he is bad, he should listen to the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy.

Mr. Quinn: Information on Ruairí Quinn Zoom on Ruairí Quinn Life is too short for that. The extraordinary complacency of the Minister of State is unbelievable given the Government's defeats in two by-elections in Tipperary South, first by Deputy Healy and later Deputy Tom Hayes on behalf of the Fine Gael Party. I can recall having animated conversations about insurance premiums in Fethard, particularly with young people and sometimes twice with the same person in the space of 12 months. One young person, in particular, who needed his car to get to work in Clonmel, complained that his insurance premiums were twice its value, although looking at it it seemed closer to three times the value. Why has the recommendation made by Deputy Rabbitte with regard to the equality issue not been implemented? As Deputy Broughan pointed out, there is virtually a 100% weighting vis-à-vis male and female drivers. On what basis?

A presentation was made to the relevant committee which was hotly disputed in terms of the data and figures provided by the insurance companies. The role of regulating the insurance industry lies with the Government which is responsible for inquiring into the level of exposure among many small industries. I have been informed by a number of small builders that, following the collapse of the Independent Insurance Company, a substantial number of them are effectively trading recklessly because, on the one hand, they cannot get the insurance cover they need, while, on the other, they are being beseeched by people to do work of one kind or another on their homes. Many of the people of this city who will have to have repairs carried out on their homes as a consequence of [1541] the floods last Friday will turn to these builders. If a problem arises or an accident occurs because of the builders, there will be a crisis because there is no proper insurance cover.

Sadly, the Minister of State is defending the inexplicable inactivity of his senior Minister, whose refusal to come before the House to address this issue is a manifestation of the extraordinary contempt which she now frequently displays to the Opposition and elected Members of the House. She refuses to recognise that, ultimately, she has full responsibility for enterprise, trade and employment. Let us take the three categories for which she has responsibility. Enterprise is being stifled and businesses are closing down as we speak because of the exorbitant cost of insurance premiums. Trade will decline as a result of the inability of companies to get the necessary cover at a price which allows them to continue trading. As a result, employment will suffer. These facts are self-evident and have been cited many times as the reasons companies have gone into liquidation or stopped trading. While they may stop trading without reporting redundancies because their employees are able to find employment elsewhere, as has been the case in the north Dublin area, it does not excuse the fact that the jobs they created in the domestic indigenous sector have, in effect, disappeared. In the dying days of the Government, I ask the Minister of State, having listened to the debate, to recognise that the problem is much more severe and acute than suggested by the lack of a sense of urgency conveyed in his personal contribution or the terms of the amendment. What we are dealing with is serious market failure.

At Question Time yesterday the Taoiseach stated in respect of the roll-out of broadband, an essential infrastructural requirement, there was an expectation at the time of the Eircom privatisation and the entry into the market of additional players that the private sector would provide the infrastructure necessary to enable the country to move to e-business or e-commerce, all the lovely buzzwords which Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, uses so eloquently. The private sector has failed to deliver what is required in the area of broadband.

Does the Minister now accept that the private sector is failing in respect of its requirement to deliver an insurance regime which is equitable, accessible to all reasonable citizens capable of participating in it as individuals, irrespective of age, small companies and enterprises? It is failing to the point that, by comparison with other countries of the European Union, its costs are exorbitant. We need to recognise this market failure and examine mechanisms, as the Taoiseach stated yesterday, for reintroducing a State company or mechanisms which will address it to the point at which competitive costs return. If needs be, we can address the other issues tiptoed around in the amendment such as legal costs, other require[1542] ments and the inequality in the treatment of citizens.

We also need to explore fully and comprehensively the real records of the insurance companies. In the light of the Enron collapse and other accounting deficiencies there is reason to look behind the audited figures of certain companies. Perhaps what we have been told by companies, which are not providing the level of cover required, needs to be fully and comprehensively examined. I am not so sure that the Department of Enterprise, Trade and Employment has devoted the necessary internal resources in the past five years to ensure the scrutiny of the insurance regime operating here is properly undertaken. This is not a reflection on the Civil Service. The allocation of staff and resources in Departments is, at all times, a responsibility of the Minister of the day. A group of people in a sector can only do so much.

This is a complex issue to which I am not suggesting there is a simple solution. Listening to the Minister of State, however, there is no prospect of a solution and certainly no hope or prospect of any relief whatsoever for the many cases highlighted today.

Mr. Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte I thank my colleagues on all sides for their contributions to this important and long overdue debate on the costs of insurance. I will not dwell on the absences from the House noted by Deputy Quinn. However, it is regrettable that a number of Fianna Fáil backbenchers have come into the House to identify with the motion and state how upset they are about young drivers not being able to pursue a livelihood because they cannot get insurance and express concern about small companies, particularly in their constituencies, which are finding it almost impossible to get insurance cover. On the other hand, the members of the Government who are capable of acting on the matters raised by their own backbenchers have not even come into the House. It is very regrettable if the stage has been reached whereby the relevant Minister does not even come to the House for Private Members' business.

As Deputy Quinn stated, the Tánaiste is the Minister responsible for enterprise, trade and employment. She has not come near the House and to add insult to injury, the Minister of State who says he is responsible—

Mr. T. Kitt: Information on Tom Kitt Zoom on Tom Kitt He is in Belfast on Government business.

Mr. Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte I hope he has more success up there than he has had in dealing with insurance costs. All night we have had a relay of Ministers of State, until the Minister of State, Deputy Tom Kitt, came in with not the faintest connection to this problem or its solution. That is eminently regrettable, Sir.

I do not want to retrace the territory I covered last night but it seems this Minister of State is constantly one report away from taking action. [1543] He does not seem to understand that many companies in this country have taken a 100% hit in the last two years – that is a fact. Companies in certain high risk sectors cannot get cover at all. As Deputy Quinn has said, some of them are trading recklessly as a result. There is no mandatory cover in terms of public liability or employers' liability. I know of situations, for example, in the haulage industry where some hauliers are reduced to insuring four trucks and not insuring three others in the hope they can change the number plates if there is an unfortunate accident because they cannot get cover. It is more difficult for those in a vulnerable high risk area to get cover at a reasonable price. I do not want to labour the point about terrorist risk not being insured but I do not think the public knows that if there was a bomb in any part of this jurisdiction, it would not be covered.

On the question of jobs being lost, we had that from the Government side of the House. Jobs are being lost and are threatened. Last night Deputy Gerry Reynolds told the House about three young fellows in his constituency who, because they could not get reasonably priced insurance for their motor cars to go to work, are now working in Birmingham. That is the kind of implication about which we are talking. Then, of course, there are young drivers who, as Deputy Upton said, are likely to be charged twice as much for insurance cover as they are for the vehicle in which they are going to work in the first place.

I met a colleague of the Minister of State on my way into the House. He said, “Don't forget to raise my experience”. He took a cheque out of his pocket that a constituent sent him. As a small builder, he wanted to insure a small job for £96,000 and he had to raise a bond. He raised the bond with Allianz for £5,900. He paid the £5,900 and the company sent it back to him with a letter saying that it would proceed to provide the bond provided he could lodge security against the £96,000. That situation is ridiculous and was raised with me by a colleague of the Minister of State.

I was upset last night by the distortion of the Minister of State's record as he put it in the House. I would like to look for a moment at the question of the personal injuries assessment board. I know the Minister of State said this problem has only become really serious in the last two years. He is right up to a point – it has got immensely serious in the last two years – but it has been serious for years. Let me recount the situation again. In April 1997 I took the first McCauley report that recommended the establishment of a personal injuries tribunal. In May of that year I authorised, on a pilot basis, its implementation and that it proceed on the second limb of the then Cabinet decision which was to examine alternative methods of delivery of compensation. It was not established on a pilot or any other basis and the McCauley group went out of [1544] existence for some reason I still do not know and was revived only after a row in this House in September 1998. That was 15 months later and nothing had happened in the interim. What happened then was that it started its work afresh and reported in March 2001 – four years after 1997.

It is now February 2002 and absolutely nothing has been implemented. What did McCauley recommend in his second report? He recommended exactly what was recommended in the first McCauley report. His main recommendation, to use the Minister of State's own language, was to set up a personal injuries tribunal only this time it was to be called a personal insurance assessment board. It was the same recommendation he made in 1997 but the Department and the Minister were persuaded it was a great idea even though it was there to be implemented. After the June 1997 election, nothing happened.

I am quite disturbed at the attempt to misrepresent. I took out some papers with me and I was very tempted to break a long standing convention and read it into the record of the House. Rather than read it into the record of the House, seeing as it is quite personal in terms of where it is focused, I ask the Minister of State to go back to the files and look at a memorandum I wrote to the Assistant Secretary on 17 December 1996. That may take some of the wind out of the Minister of State, Deputy Treacy's sails, although he has a lot of wind in his sails.

I heard all the things the Government is doing to address this situation. I got a phone call today in respect of one thing which has been done – again after a wait of three years – and that is the penalty points system. The phone call was from someone who saw something about this debate, although I do not know how he managed to do that as it is extremely difficult to see journalists writing about anything serious these days or anything that has not to do with Liam Lawlor's breakfast arrangements. This person, concerned with the industry, told me that we cannot implement the penalty points system because the Garda requires €12 million to adapt the PULSE system. After a battle, it has received €1 million. That is the situation as regards the great big breakthroughs we made in that particular area.

On the question of the Minister of State and the progress he is making, it was flushed out on Question Time. Deputy Flanagan asked him to name three things he had done. He could not name three things he had done but told us he cannot get the information he needs; that he cannot get the report he wants; that he cannot do anything until he gets the report; and that he cannot implement the PIAB. That is his record. On the question of the MIAB, he confuses setting up a board with action. He keeps talking about this MIAB initiative that he took in 1998. There is still no sign of action on it. The interim report has only created confusion. If it takes him as long to act on the MIAB as it has on the PIAB, 17 year olds who were in primary school when the Minister of State, Deputy Treacy, took over, will be [1545] middle aged by the time he gets around to doing anything about it. He probably expected that he would escape to Europe and that he would not have to take any of these decisions.

The fixed mantra on successive Question Times has been, “I wandered lonely as a cloud, I'm doing me best in the face of adversity, I'm waiting for the report and didn't I set up the committee comprising really eminent people.” He made it sound like a forum of celebrities. He said as soon as he got the report he would vigorously pursue its implementation.

I agree with the Minister of State, Deputy Tom Kitt, that this is a complex issue – I never said otherwise. It is a complex issue and the industry is facing its own difficulties about which there can be no doubt. Legal costs need to be tackled. I do not know why Deputy Kirk said I did not deal with remedies. I dealt with many remedies, [1546] including the Equality Authority assessment of discrimination against young drivers; the need to establish the PIAB; the need to tackle legal and expert costs and the delay in settlements; the need to invoke section 46 of the Courts and Court Officers Act; the need to reform court procedure; the need to introduce mandatory employers liability; the need to establish the penalty points system and provide the Garda with the wherewithal to implement the PULSE system; the need to tackle the question of provisional driving; and the need to continue the programme of improvements in our infrastructure, drink driving, road traffic and so on.

There is no urgency or recognition in Government of the reality of employers now confronting inordinately priced insurance and young drivers who cannot get the basic wherewithal to earn a living.

Amendment put.

Ahern, Dermot.
Ahern, Noel.
Andrews, David.
Aylward, Liam.
Blaney, Harry.
Brady, Johnny.
Brady, Martin.
Brennan, Matt.
Brennan, Séamus.
Briscoe, Ben.
Browne, John (Wexford).
Byrne, Hugh.
Callely, Ivor.
Carey, Pat.
Collins, Michael.
Cooper-Flynn, Beverley.
Coughlan, Mary.
Cowen, Brian.
Cullen, Martin.
Daly, Brendan.
Davern, Noel.
de Valera, Síle.
Dempsey, Noel.
Dennehy, John.
Doherty, Seán.
Ellis, John.
Fahey, Frank.
Fleming, Seán.
Flood, Chris.
Foley, Denis.
Fox, Mildred.
Gildea, Thomas.
Hanafin, Mary.
Haughey, Seán.
Healy-Rae, Jackie.
Jacob, Joe.
Keaveney, Cecilia.
Kelleher, Billy.
Kenneally, Brendan.
Killeen, Tony.
Kirk, Séamus.
Kitt, Michael P.
Kitt, Tom.
Lenihan, Brian.
Lenihan, Conor.
McCreevy, Charlie.
McDaid, James.
McGennis, Marian.
McGuinness, John J.
Martin, Micheál.
Molloy, Robert.
Moloney, John.
Moynihan, Donal.
Moynihan, Michael.
Ó Cuív, Éamon.
O'Dea, Willie.
O'Donoghue, John.
O'Flynn, Noel.
O'Hanlon, Rory.
O'Keeffe, Batt.
O'Keeffe, Ned.
O'Kennedy, Michael.
Power, Seán.
Roche, Dick.
Ryan, Eoin.
Smith, Michael.
Wade, Eddie.
Wallace, Dan.
Wallace, Mary.
Walsh, Joe.
Wright, G. V.

Níl

Allen, Bernard.
Bell, Michael.
Belton, Louis J.
Bradford, Paul.
Broughan, Thomas P.
Browne, John (Carlow-Kilkenny).
Bruton, John.
Bruton, Richard.
Burke, Ulick.
Carey, Donal.
Clune, Deirdre.
Connaughton, Paul.
Cosgrave, Michael.
Coveney, Simon.
Crawford, Seymour.
Currie, Austin.
D'Arcy, Michael.
Deasy, Austin.
Dukes, Alan.Enright, Thomas.[1547]

Níl–continued

Farrelly, John.
Finucane, Michael.
Fitzgerald, Frances.
Gilmore, Éamon.
Gormley, John.
Hayes, Brian.
Hayes, Tom.
Healy, Seamus.
Higgins, Jim.
Higgins, Joe.
Higgins, Michael.
Howlin, Brendan.
Kenny, Enda.
McCormack, Pádraic.
McDowell, Derek.
McGahon, Brendan.
McGinley, Dinny.
McGrath, Paul.
McManus, Liz.
Mitchell, Gay.
Mitchell, Olivia.
Moynihan-Cronin, Breeda.
Naughten, Denis.
[1548]Neville, Dan.
Ó Caoláin, Caoimhghín.
O'Keeffe, Jim.
O'Shea, Brian.
O'Sullivan, Jan.
Owen, Nora.
Penrose, William.
Perry, John.
Quinn, Ruairí.
Rabbitte, Pat.
Reynolds, Gerard.
Ring, Michael.
Ryan, Seán.
Sargent, Trevor.
Shatter, Alan.
Sheehan, Patrick.
Shortall, Róisín.
Stagg, Emmet.
Stanton, David.
Timmins, Billy.
Upton, Mary.
Wall, Jack.

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Bradford and Stagg.

Amendment declared carried.

Question put: “That the motion, as amended, be agreed to.”

Ahern, Dermot.
Ahern, Noel.
Aylward, Liam.
Blaney, Harry.
Brady, Johnny.
Brady, Martin.
Brennan, Matt.
Brennan, Séamus.
Briscoe, Ben.
Browne, John (Wexford).
Byrne, Hugh.
Callely, Ivor.
Carey, Pat.
Collins, Michael.
Cooper-Flynn, Beverley.
Coughlan, Mary.
Cowen, Brian.
Cullen, Martin.
Daly, Brendan.
Davern, Noel.
de Valera, Síle.
Dempsey, Noel.
Dennehy, John.
Doherty, Seán.
Ellis, John.
Fahey, Frank.
Fleming, Seán.
Flood, Chris.
Foley, Denis.
Fox, Mildred.
Gildea, Thomas.
Hanafin, Mary.
Haughey, Seán.
Jacob, Joe.
Keaveney, Cecilia.
Kelleher, Billy.
Kenneally, Brendan.
Killeen, Tony.
Kirk, Séamus.
Kitt, Michael P.
Kitt, Tom.
Lenihan, Brian.
Lenihan, Conor.
McCreevy, Charlie.
McDaid, James.
McGennis, Marian.
McGuinness, John J.
Martin, Micheál.
Moffatt, Thomas.
Molloy, Robert.
Moloney, John.
Moynihan, Donal.
Moynihan, Michael.
Ó Cuív, Éamon.
O'Dea, Willie.
O'Donoghue, John.
O'Flynn, Noel.
O'Hanlon, Rory.
O'Keeffe, Batt.
O'Keeffe, Ned.
O'Kennedy, Michael.
Power, Seán.
Roche, Dick.
Ryan, Eoin.
Smith, Michael.
Wade, Eddie.
Wallace, Dan.
Wallace, Mary.
Walsh, Joe.
Wright, G. V.

Níl

Bell, Michael.
Belton, Louis J.
Bradford, Paul.
Browne, John (Carlow-Kilkenny).
Bruton, John.
Bruton, Richard.
Burke, Ulick.Carey, Donal.[1549]

Níl–continued

Clune, Deirdre.
Connaughton, Paul.
Cosgrave, Michael.
Coveney, Simon.
Crawford, Seymour.
Currie, Austin.
Deasy, Austin.
Deenihan, Jimmy.
Dukes, Alan.
Enright, Thomas.
Farrelly, John.
Finucane, Michael.
Fitzgerald, Frances.
Gilmore, Éamon.
Gormley, John.
Hayes, Brian.
Hayes, Tom.
Healy, Seamus.
Higgins, Jim.
Higgins, Joe.
Higgins, Michael.
Howlin, Brendan.
Kenny, Enda.
McCormack, Pádraic.
McDowell, Derek.
McGahon, Brendan.
McGinley, Dinny.
[1550]McGrath, Paul.
McManus, Liz.
Mitchell, Olivia.
Moynihan-Cronin, Breeda.
Naughten, Denis.
Neville, Dan.
Ó Caoláin, Caoimhghín.
O'Keeffe, Jim.
O'Shea, Brian.
O'Sullivan, Jan.
Owen, Nora.
Penrose, William.
Perry, John.
Quinn, Ruairí.
Rabbitte, Pat.
Reynolds, Gerard.
Ring, Michael.
Ryan, Seán.
Sargent, Trevor.
Shatter, Alan.
Sheehan, Patrick.
Shortall, Róisín.
Stagg, Emmet.
Stanton, David.
Timmins, Billy.
Upton, Mary.
Wall, Jack.

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Bradford and Stagg.

Question declared carried.


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