Law Society Update: ‘80% of measures’ to reduce cover costs now in place

A report on the Action Plan for Insurance Reform shows that 80% of planned measures have been implemented.

https://www.lawsociety.ie/gazette/top-stories/2022/80-of-measures-to-reduce-cover-costs-now-in-place

Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar said that the Government was committed to bringing down the cost, and increasing the availability of, insurance.

The end goal was to make Ireland’s insurance sector more competitive and consumer-friendly, supporting enterprise and job creation, he added.

Decreased awards
“We have seen some evidence that our plans, so far, are working – PIAB data shows the average award has decreased by approximately 50%.

“Data from the Central Bank shows the average cost of claims for motor-insurance policies has decreased by 20%,” he said.

However, more needs to be done to reduce costs, he added.

“In 2022, our focus will be on legislative reforms. Specifically, reform of occupier’s liability, competition enforcement, and the Personal Injuries Assessment Board.

“The Insurance (Miscellaneous Provisions) Bill will also be progressed. We will continue to monitor costs to make sure the changes we are making are reflected in premium reductions,” he said.

According to the Government, actions to date include:

  • Personal-injury guidelines have been given effect,
  • Legislation to strengthen the laws on perjury,
  • Establishment of an office to promote insurance-market competition,
  • An Insurance Fraud Coordination Office has been established.

The following steps are planned for 2022:

  • Reform of duty-of-care legislation,
  • Progress the Personal Injuries Resolution Bill 2022,
  • Enactment of the Insurance Miscellaneous Provisions Bill 2021,
  • Enactment of the Competition Amendment Bill 2022.
  • Justice minister Helen McEntee said that her department had completed a review of the Occupiers’ Liability Act, and was engaging with the Office of the Attorney General on proposed amendments to the act.

“It is my intention that, subject to receiving that advice, these proposals, which seek to ensure an appropriate, fair, and constitutional balancing of the rights of all concerned, will be brought to Government for approval in the coming weeks,” she said.

Providers must ‘expand risk appetite’
Sean Fleming (Minister of State Department of Finance with responsibility for financial services, credit unions and insurance) welcomed the recent launch of the Central Bank’s new databank, which will provide a focal point for insurers considering entering the Irish market.

“This initiative should help attract overseas providers into the Irish market, as well encouraging existing providers to expand their risk appetite,” he said.

However, the Law Society’s personal-injury expert Stuart Gilhooly SC hit back, saying: “While it is gratifying that Government is making steps to reduce the cost of insurance, it continues to focus its efforts in the wrong direction.

“Injury victims have seen their compensation slashed and with minimal return to consumers,” the senior counsel added.

‘Disingenuous industry’
“Damages are down by at least 50%, but the numbers of claims made have also reduced by approximately one-third since 2019.

“The fact that insurance premiums have seen such paltry reductions is a poor reflection on the insurance industry – but certainly no surprise. They will continue to take advantage of the gradual erosion of victims’ rights, which will carry on unchecked while they sit in their ivory towers counting their super-profits.

“When will Government stop kowtowing to this disingenuous industry at the expense of ordinary citizens, injured through no fault of their own?” Stuart Gilhooly SC queried.

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